Introduction
Corporate governance is an area that is interesting to business persons, executives, investors, and educators, but it is also actively discussed by the wide audience, and its aim is to answer the questions regarding firms’ responsibilities and relationships with stakeholders. In his book A Primer on Corporate Governance, Dr. Cornelis de Kluyver presents basics of governance in corporations and provides important guidelines for persons interested in the subject. However, the author also aims at answering the critical question regarding corporations’ purposes and targets of firms’ services while paying attention to the stakeholder and shareholder perspectives that explain debates in the field. The purpose of this paper is to present a review of the book with the focus on the main aspects discussed by the author and evaluate the author’s attempts to provide answers to the important questions in the area of corporate governance with reference to the historical context and real-life examples.
Background Information
There are many questions and controversial ideas associated with the concept of corporate governance in the context of the United States. Dr. Cornelis de Kluyver has the experience of working as a director of NASDAQ and as a management consultant (De Kluyver, 2009). Consequently, the book can be viewed as a result of synthesizing the author’s experience in the field. The book also refers to the conclusions made after discussing the modern approach to corporate governance with pioneers and experts in the area. Therefore, the criteria for judging the book are its relevance to be proposed as a primer for students and persons who do not have the background knowledge regarding corporate governance and its appropriateness to provide answers to the debates that are interesting to experts in the field.
Summary
Dr. de Kluyver has divided the book into three large parts. In the first part of the book, corporate governance is discussed from a macro perspective as a system that has its purpose, principles, and major actors. Much attention is paid to discussing the roles of shareholders and stakeholders, and the author tries to answer the following question: “Do shareholders own the company?” (De Kluyver, 2009, p. 27). Thus, Dr. de Kluyver takes different perspectives while analyzing shareholders’ and stakeholders’ interests in the context of firms’ actions and strategies directed to the value maximization. The author provides definitions of the basic concepts, descriptions of historical events and real-life examples, discussions of the key governance principles and the issue of accountability, as well as the description of the board of directors and associated roles. Furthermore, much attention is paid to analyzing the US approach to creating the corporate governance system and the recent reforms in the field, as well as to comparing this system to other business governance strategies in the world.
While focusing on different examples of corporate governance patterns around the globe, the author states that the lack of a consensus regarding “why a company exists, to whom directors are accountable, and what criteria they should use to make decisions … is a significant obstacle to increasing the effectiveness of the corporate governance function” (De Kluyver, 2009, p. 36). Therefore, the second part of the book provides the detailed discussion of the main elements of corporate governance systems. Dr. de Kluyver describes responsibilities that the board members have and concentrates on explaining such issues as succession planning, the selection of CEOs, the evaluation of their performance, and debates regarding the size of executives’ compensations.
The author provides the detailed discussion of such issues as risk management, a process of developing strategies, a process of forming the high-performance board, and a process of overcoming external pressures and obstacles. The third part of the book is an epilogue in which the author discusses future perspectives related to the development of corporate governance in terms of using innovative practices and addressing the latest social and business requirements (De Kluyver, 2009). According to Dr. de Kluyver, the main factors that can influence the development of the idea of corporate governance in the future are globalization, changes in shareholders’ perspectives, and changes in relationships between companies and stakeholders.
Evaluation
The goal of Dr. de Kluyver’s book is to explain all important issues related to corporate governance systems, including responsibilities and interests of the main actors. The content of the book is discussed as appropriate for both beginners and specialists in the field. It is important to state that the author has achieved his goal, and the book can provide students with the knowledge regarding the basic concepts and executives with the most effective strategies to use in their practice. Furthermore, while answering the question regarding the shareholder-stakeholder debates in the field, Dr. de Kluyver does not take the certain position, but he aims to discuss the issue from several perspectives. From this point, the central lesson of the book is that corporations should serve interests of both shareholders and stakeholders as it is equally important to guarantee profits for owners and contribute to the society while providing stakeholders with certain benefits.
Thus, the strength of the book is its appropriateness for the wide audience of readers who want to learn how corporations can be governed effectively. Furthermore, the author discusses the question of corporate governance from different angles and supports his conclusions by real-life examples (De Kluyver, 2009). Still, while focusing on this or that view presented in the work, Dr. de Kluyver is inclined to support his words only by one reference. The book includes discussions of controversial ideas; therefore, to make a certain argument, it is important to provide several references. The topic of corporate governance is interesting to be discussed in detail, and the book provides answers to all main questions that can be asked by each person who wants to explore the specifics of creating the governance system and building the relationships with the community.
Conclusion
Dr. de Kluyver’s A Primer on Corporate Governance is proposed as a guide for the audience interested in aspects of corporate governance, the work of boards of directors, and the use of strategies to develop corporations. The book includes definitions of the main concepts related to the field, and the author supports them with examples of the recent and widely known controversial events and challenges. In spite of the fact that the book includes a lot of appropriate information to be discussed by beginners and experts, it is possible to conduct the further research regarding the trends and perspectives related to the future development of corporate governance systems in order to add the information to the third part of the book. A Primer on Corporate Governance is important to be used by students, educators, and executives because it provides a range of viewpoints regarding the approaches to overcoming crises and coping with ethical and business issues.