The evolution of corporate governance theories: An update

The evolution of corporate governance theories: An update

Douglas E. Stevens, Ph.D., at the School of Accountancy, Robinson College of Business, provides an update on the evolution of corporate governance theories. In 2022, I wrote a controversial paper titled ‘In Search of a New Chicago School’. I had written two books related to the theory of the firm and was becoming increasingly dissatisfied with the status quo. I began by discussing neoclassical economists’ resistance to previous attempts to revise the theory of the firm. Next, I discussed the outcome of that resistance: an economic theory that largely failed to describe common governance systems and management controls in practice. Throughout the rest of the paper, I described recent efforts to revise the theory of the firm by relaxing the assumption of self- interest, incorporating insights from stakeholder theory, and incorporating important individual and social factors left out of the theory.