Rethinking Corporate Governance
Professor emeritus Sven-Erik Sjöstrand
This project tries to provide an answer to a crucial and classic research question foremost addressed in the economic sciences, namely: What are the main forces that decide the long-term development of (large global) corporations - and how do these forces operate? That empirically flavoured purpose is accompanied with an ambition to develop corporate governance theory. The approach that will be used in this effort contains three main ingredients, namely (driving) forces, arenas and corporate paths. Driving forces basically emerges from five sources that ultimately influence corporate development: cultures, institutions, science, occurrences and actors. In this study actor-hood is crucial. A basic belief is that even though culture, institutions, science and occurrences represent crucial sources of influence on long-term corporate development, there is also, at the same time, room for human discretion. Thus, human action is not exclusively determined by 'environmental forces' (i.e., culture,, institutions, and occurrences) or executed as non-reflective or non-conscious habitual behaviour. Actors linked to a corporation all hold a potential to influence its long-term development by providing perspectives, judgments and actions that create, modify, alter or destruct existing conditions.
To identify the main forces involved in the formation of corporate paths over longer time periods it has been necessary to carry out an extensive empirical study. Therefore, careful descriptions regarding how large listed corporations have developed over several centuries is provided. However, soon it became evident that to really get a grip of what could explain that kind of development process, it would be a great advantage if the focal company's main competitors also were included in the empirical material, and then roughly on the same terms. Thus, this study developed into something that reminded of a big industry investigation with a 'parallel and similar focus' on four large corporations, something unusual in research efforts in the economic sciences. Although the empirical than had to embrace many centuries, the emphasis isi put on the time period following World War II, and particularly the fifty years between 1960 and 2010. The data quality for the last half-century became extraordinary as it was possible to discuss what actually took place (including when and why) with almost all of the leading actors during that period (i.e., first and foremost the shareholders, directors, and leading managers in the focal corporations). The sources for what happened before the 1950s had to be various kinds of documents (private as well as public; open as well as classified) including various kinds of books (e.g., biographies, research reports, jubílee volumes, etc.).