Who Should Control the Firm? Insights from New and Original Institutional Economics
Business scandals in the USA, Japan, and Europe have initiated changes in the laws of corporate governance, for instance, the Sarbanes-Oxley Act in the USA, the renewal in the UK on initiative of Derek Higgs, the Cromme-Code in Germany, the Loi de S&curite Financi&re in France, and the Tabaksblat-Code in the Netherlands. These issues are about the question of who should control the firm and how this can be done efficiently. In this paper an overview of the issues in the field is given and theoretical insights offered by new and original institutional economics are discussed. 'What are the guidelines offered by institutional economics when changing the laws and codes concerning the governance of firms?