Corporate Governance and Accountability by Jill Solomon and Aris Solomon is one of a number of texts which have been released in recent times to fill this new demand.. Using an internati
Trang 1Book Reviews
Corporate Governance and Accountability
Jill Solomon and Aris Solomon, Wiley, 2004 303 pages, ISBN 0-470-84365-9, £24.95 Corporate governance is one of the most rapidly expanding topics in university education Corporate failures such as the high profile Enron case of 2001 have heightened public and academic awareness of the subject However, until recently there has been a relative dearth of textbooks in the area Corporate Governance and Accountability by Jill Solomon and Aris Solomon is one of a number of texts which have been released in recent times to fill this new demand
Corporate Governance is a broad topic which intersects with a number of different business and management subject areas Using an international context but with particular attention on the UK, Corporate Governance and Accountability seeks to provide a summary of the theory and practice of corporate governance The book provides both a review of the historical development of corporate governance and a broad examination of corporate governance in the
UK since the introduction of the Cadbury report (1992) Using a descriptive style, Solomon and Solomon draw on a wide range of academic research, including some of their own, to inform their discussions and support their interpretation of the world of corporate governance
In Part I the book takes a broad view of corporate governance issues beginning with the theoretical frameworks (agency costs, transaction costs and stakeholder theory) and going
on to examine the Enron case and the UK corporate governance reforms of the 1990s in more detail Particular attention is then paid to the roles of boards of directors, institutional investors and transparency Charkham (1994) identified two key aspects of corporate governance which should be examined when judging a corporate governance system— dynamism and accountability As the title suggests, the focus of the this text tends to be on accountability rather than on managerial dynamism
The second part of the book introduces readers to corporate governance in a global context and discusses moves towards harmonisation of governance systems The main body
of this section is a limited reference dictionary of corporate governance systems Evidence from academic research and policy documents is used to briefly outline the characteristics of the corporate governance systems of 27 different countries around the world It is nothing more than a briefing but it is interesting in its own right and successfully illustrates the diverse range of corporate governance systems world-wide
In Part III, the authors allow themselves some freedom to pursue discussion of corporate social responsibility Chapter 9 provides a review of the relationship between
The British Accounting Review 36 (2004) 459–464
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10 takes the reader further into the world of socially responsible investment with particular attention paid to the role of institutional investors
As already stated some issues are almost conspicuous by their absence There are two main systems of corporate governance—market-based and bank-based There is little consideration here of the role of financial markets in corporate governance Most texts explicitly recognise that the UK is a market-based system and that financial markets play a key role in corporate governance Here we find a strong focus on internal governance There is some discussion of institutionalandshareholderactivismalthoughitismostlylimitedtotheirroleintheaccountability
of companies Perhaps most conspicuous though is lack of consideration of the role of banks
In summary, Part I is a very useful review of the current state of corporate governance Part II provides an interesting look at global corporate governance systems and Part III provides the reader with some insight into corporate social responsibility The overall focus is biased strongly towards the role of corporate governance systems in providing accountability whilst neglecting the important role it plays in allowing managerial dynamism (Charkham, 1994) Corporate governance systems must provide a balance between these two characteristics—such a balance is not presented here
Corporate Governance and Accountability is well written and includes a selection of useful illustrations to support the discussion The authors also use the results of a questionnaire survey of institutional investors to illustrate some aspects of the presented material The text is well referenced with relevant conclusions of numerous research papers and policy documents As such Corporate Governance and Accountability serves
as a useful reference text for conducting a literature review on accountability
For module leaders, this text may provide a useful resource for coverage of accountability or corporate social responsibility It may also be useful as a reference text for academics wishing to present a class or two on the diversity of corporate governance systems around the world However, it lacks depth in most areas covered The strengths are the coverage of the roles of boards of directors, institutional shareholders and transparency Particularly original is the role of disclosure in terms of transparency and in terms of socially responsible investment It is, however, a limited text and would be more appropriate in the early phases of an undergraduate degree programme in management or accounting
Reference
Charkham, J., 1994 Keeping Good Company—A Study of Corporate Governance in Five Countries Oxford University Press.
Edward A.E Jones School of Management and Languages, Heriot-Watt University,
Riccarton, EH144AS Edinburgh, Scotland, UK
E-mail address: e.a.e.jones@hw.ac.uk doi:10.1016/j.bar.2004.07.002
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