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The Opportunity for Re‐inventing Corporate Governance in Joint Venture Companies
Author(s) -
Carver John
Publication year - 2000
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/1467-8683.00182
Subject(s) - corporate governance , business , joint venture , accounting , accountability , shareholder , dual (grammatical number) , order (exchange) , control (management) , joint (building) , management , finance , economics , political science , business administration , law , architectural engineering , art , literature , engineering
Joint venture boards – compared with widely held companies – may prove more amenable to changes in corporate governance theory that significantly alter traditional patterns for directors, chairmen, and chief executive officers. Parent companies’ control over directors is more direct than that exercised by widely scattered shareholders or even institutional investors. Therefore, parent companies have a vested interest in joint venture board strength in order that parents be fittingly represented. Yet they also understand the crucial importance of relatively robust management. This dual, albeit competing, motivation makes attractive any approach to governance that assures strong directors, a rigorous chain of accountability, and, at the same time, an appropriately empowered chief executive. The author’s Policy Governance model offers these improvements to board leadership, but compels fundamental changes from traditional board practice. The ownership circumstances found in joint venture companies are favourable for implementing the new paradigm.