Prof. Jayanth R. Varma’s Financial Markets Blog

A blog on financial markets and their regulation

Governance of Investment Institutions

Just before my long vacation, I wrote an article for CFO-Connect arguing that the corporate governance problems of the twentieth century are essentially problems of governance at the big investment institutions. These problems meant that shareholder empowerment ceased to be an effective corporate governance weapon. I also argue that I expect this century to be different because of the rise of hedge funds and also improvements in governance at other institutions. If shareholder empowerment works, empowerment and reform of the Board becomes less important than reconnecting the Board to the company. That leads to a different way of looking at Sarbanes-Oxley.

The text of this article as I wrote it is available here. The scanned image of the article as it appeared in print is also available.

This is my first post after a long vacation.

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