Corporate governance and the surrogates of managerial performance

This paper examines the theorised approaches to the corporate governance of listed companies in the US-UK-Australian jurisdictions, and the surrogates of corporate governance that have emerged as a consequence. It looks at the ascendancy of finance over accounting data as the driving force in corporate governance, and in this context the symbiotic nature of the relationship between takeovers, executive compensation, share price, and corporate governance. While differences in the system of corporate governance in these three jurisdictions exist at the operational level, the structural similarities of the governance system in these jurisdictions make such differences as may exist in relation to the former to be of little relevance. To further illustrate the point of convergence in these three jurisdictions, and at the same time stress their divergence in relation to some other highly developed economies, the study also makes incidental comparisons with the Japanese and German experiences where necessary. Moreover, while the paper does not claim that the changes in the US-UK-Australian governance are a simultaneously occurring event, it does claim that the trends set by the shifts in paradigm in US corporate governance flow through readily into the Australian and UK corporate governance systems by reason of their being stock market capital based finance systems as against the bank capital based finance systems of Germany and Japan.