Corporate Governance and Innovation- Insight and Prospect

Very little empirical research exists that attempts to measure the effectiveness of corporate governance on innovativeness. For this it is crucial to consider the two main approaches (agency theory and stewardship theory) to corporate governance. However, the theory of corporate governance is strongly influenced by agency theoretical considerations. This book, first, attempts to show the relationship between corporate governance mechanisms and innovativeness. Thereby, the agency approach to corporate governance is questioned. Further, the influence of culture as an external variable to the practice of corporate governance is considered. The corporate governance mechanisms ownership structure, board composition and CEO duality have beside control and incentive systems significant influence on a firm's innovativeness. Furthermore, empirical findings show that stewardship theory is generally more effective in corporate governance in context with innovativeness then agency theory. Finally, an own theoretical framework is developed that shows that the influence of the theoretical approaches to corporate governance is dependent on the organization's situational culture type. This book is targeted to researchers, students and consultants and everyone else showing interest in organizational behaviour.