- Home
- Corporate Governance: Promises Kept, Promises Broken
Corporate Governance: Promises Kept, Promises Broken
By Jonathan Macey ’82, Deputy Dean and Sam Harris Professor of Corporate Law, Corporate Finance, and Securities Law
Princeton University Press, 2008
In Corporate Governance: Promises Kept, Promises Broken, Macey argues that promises (rather than contracts) are at the heart of a successful system of corporate governance. In Macey’s words, “trust rather than reliance on the prospect of enforcement is the focal point of a successful system of corporate governance.”
This timely book examines different mechanisms of corporate governance and ultimately argues that market-driven mechanisms of corporate governance (i.e., trading and takeovers) are more effective solutions than non-market devices such as boards of directors, shareholder voting, credit-rating agencies, and whistle-blowers.
According to Macey, reliance on the Sarbanes-Oxley Act is badly misplaced, and heightened government oversight has put a stranglehold on the market. Macey argues for the power of the market to self-regulate; he sees the pricing capabilities of the capital markets as the most effective mechanism for corporate governance.
A podcast of Professor Macey speaking about Corporate Governance is available at www.law.yale.edu/podcasts.
