Ownership as a Form of Corporate Governance

Brian L. Connelly, Robert E. Hoskisson, László Tihanyi, S. Trevis Certo

Journal of Management Studies · 2010 · 479 citations · 165 references

Concepts

TL;DR

Firm ownership is an increasingly influential form of corporate governance, yet most studies focus on a single owner type and firm outcome in isolation. The study synthesizes multidisciplinary research on owner types and proposes a unifying governance framework, while outlining future research directions and questions. The framework describes owner motivations, tactics, and the firm outcomes they aim to influence. The study shows that greater managerial awareness of diverse owner interests amplifies owner influence on firm outcomes and highlights emerging ownership forms such as hedge funds and sovereign wealth funds, underscoring shifting and competing shareholder interests that affect governance theories.

Abstract

abstract Firm ownership is an increasingly influential form of corporate governance. Although firms might be owned by different types of owners, most studies examine owner influence on a particular firm outcome in isolation. This study synthesizes research from multiple disciplines on different types of owners and offers a unifying framework of governance through ownership. Using this framework, we describe the motivations of various types of owners, the tactics owners use to affect firms in which they are invested, and the dominant firm outcomes these owners seek to influence. We note how heightened managerial awareness of heterogeneous owner interests increases owner influence on firm‐level outcomes. We also provide a roadmap for future study and offer research questions about where scholars might turn their attention to better understand the role of owners in directing firm actions. Our study draws attention to emerging forms of ownership, such as hedge funds and sovereign wealth funds, and highlights the changing (and often competing) interests of shareholders and how this impacts theories of governance.

References

165