The Corporate Governance of Business Groups: What We Know and What Lies Ahead
By Ruth V. Aguilera, Northeastern University, USA, r.aguilera@northeastern.edu | Ryan Federo, Universitat de les Illes Balears, Spain, ryan.federo@uib.es | Bartolome Pascual-Fuster, Universitat de les Illes Balears, Spain, tomeu.pascual@uib.es | Rafel Crespi-Cladera, Universitat de les Illes Balears, Spain, rafel.crespi@uib.es
Abstract
In this monograph, we discuss the corporate governance of business groups (BGs). To this end, we broadly define both BGs and corporate governance to provide an inter-disciplinary conceptualization. We begin by reviewing the key governance theories that scholars have applied to BGs thus far. We then examine the different corporate governance dimensions (ownership, boards of directors, top-management teams, external control mechanisms, and sustainability-related issues) across the different types of BGs. As a result, we identify what we know about these organizations’ corporate governance mechanisms. We close with a detailed discussion of fruitful areas for future research on BG corporate governance based on the gaps we identify.
The Corporate Governance of Business Groups: What We Know and What Lies Ahead
The Corporate Governance of Business Groups first summarizes how the existing body of literature has defined and studied business groups (BG). It then discusses the arguments for why BGs exist and persist. To provide a contextual understanding of BGs, the authors present the worldwide distribution and structure of these organizations. Gaining an overview of BGs’ and their affiliated firms’ characteristics allows one to disentangle the various dimensions of their corporate governance, particularly focusing on identifying what we know about how they are governed and where future research should continue. The authors adopt a traditional corporate governance framework based on financial economics to discuss BGs’ corporate governance mechanisms. This financial perspective is complemented by incorporating an organizational and sociological lens to better understand how ties among the affiliate firms influence BG governance. Overall, the monograph argues that BG corporate governance is a fruitful path for scholars to continue to examine because many internal and external governance mechanisms remain understudied and the specificities of BGs generate differences in how these mechanisms are understood in these organizations, resulting in gaps in the literature ripe for future research.
