Corporate Governance of Non-listed Companies

My new book, Corporate Governance of Non-listed Companies (Oxford University Press, 2008), which I co-wrote with Erik Vermeulen, examines the set of legal rules and measures needed to improve the governance of non-listed companies. Studies of corporate governance traditionally focus on the governance problems of large publicly held firms, and policymakers’ recommendations often focus on such firms. However most small firms, and in many countries, even many large companies, are non-listed. We provide a comprehensive account of non-listed firms and their particular governance problems.

The book explores current discussions and reforms in Europe, the United States, and Asia providing a state of the art account of the law and the economics. Non-listed firms encompass a vast range, from corporations with the potential to go public through family-owned firms, group-owned firms, private equity and hedge funds, to joint ventures and unlisted mass-privatized corporations with a relatively high number of shareholders. The governance of non-listed companies has traditionally been concerned with protecting investors and creditors from managerial opportunism. However, the virtual elimination of the distinction between partnerships and corporations means that an effective legal governance framework must also offer mechanisms to protect shareholders from the misconduct of other shareholders. Our book examines policy and economic measurements to develop a framework for understanding what constitutes good governance in non-listed companies. We examine how control is gained in the various types of closely held firms and explore the techniques that contribute to the development of a modern and efficient governance framework for these companies. The book concludes with an exploration of how the non-listed firm is likely to stimulate growth and extend innovation and development.