The Small Worlds of Corporate Governance

The financial crisis of 2008 laid bare the hidden network of relationships incorporate governance: who owes what to whom, who will stand by whom in times of crisis, what governsthe provision of credit when no one seems to have credit. This book maps the influence of thesetypes of economic and social networks--communities of agents (people or firms) and the ties amongthem--on corporate behavior and governance. The empirically rich studies in the book are largelyconcerned with mechanisms for the emergence of governance networks rather than with what determinesthe best outcomes. The chapters identify "structural breaks"--privatization, for example,or globalization--and assess why powerful actors across countries behaved similarly or differentlyin terms of network properties and corporate governance. The chapters examine, among other topics,the surprisingly heterogeneous network structures that contradict the common belief in a singleAnglo-Saxon model; the variation in network trajectories among the formerly communist countriesincluding China; signs of convergence in response to the common structural breaks in Europe; thegrowing structural power of women due to gains in gender diversity on corporate governance inScandinavia; the "small world" of merger and acquisition activity in Germany and theUnited States; the properties of a global and transnational governance network; and application ofagent-based models to understanding the emergence of governance.

Bruce Kogut is Sanford C. Bernstein & Co. Professor of Leadership and Ethics and Director of the Sanford C. Bernstein Center for Leadership and Ethics at Columbia University. He is the author or editor of six books, including T he Global Internet Economy (MIT Press, 2003) and Knowledge, Options, and Institutions.