The impact of corporate governance on compounding inequality: Maximising shareholder value and inflating executive pay

Publication Type:
Journal Article
Citation:
Critical Perspectives on Accounting, 2018
Issue Date:
2018-01-01
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CPA 23 July 2016 Compounding Inequality & CG II.docxAccepted Manuscript Version553.2 kB
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Compounding Inequality Figures.docxAccepted Manuscript Version444.4 kB
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© 2018 Elsevier Ltd This analysis considers the dimensions of financialisation of the international economy and how this has produced a more intensive and integrated mode of accumulation. With the increasing translation of Anglo-American listed corporations into financial entities, how the dominant shareholder primacy mode of corporate governance has served to compound inequality is examined. The damaging impact of maximising shareholder value is investigated, both in terms of the long term prospects of corporations, but also in aggressively producing increased inequality in the economy and society. Finally the ultimate paradoxical outcome of agency theory and shareholder value is highlighted as the explosion of executive reward in the last two decades in the Anglo-American countries. Finally the possibilities for reform and change towards more responsible and equitable approaches are considered.
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