Theories in Corporate Governance Studies

This chapter examines the evolving landscape of corporate governance, contrasting the traditional shareholder-centric model with the more contemporary stakeholder-centric approach. Shareholderism focuses on maximizing economic value and protecting shareholders, emphasizing the relationship between ownership and management. In contrast, stakeholderism expands this relationship to include social and environmental interests and advocates management decisions that create socio-economic value. The chapter emphasizes the importance of understanding the theoretical underpinnings of both models to appreciate their evolution and current applicability. It highlights key corporate governance theories: agency theory, stewardship theory, managerial theory, and property rights theory for shareholderism; and stakeholder theory, socio-emotional wealth theory, and social exchange theory for stakeholderism. The chapter also discusses the relevance of socio-emotional factors and trust-based governance, particularly through the lens of the Olivetti case, which exemplifies a successful integration of relational and family governance principles.