Abstract
This paper examines the issues relating to the most appropriate form of corporation ownership including organizational and cultural systems that will maximize the firm's value to society whilst maintaining a more sustainable market value. The paper argues that the maximization of firm value to society may be more readily achieved through a closed corporation type formation with better rights protection for all internal stakeholders, such as an employee-owned corporation or a limited liability partnership similar to Scott Bader Commonwealth and John Lewis Partnership, rather than a publicly-owned open corporation with large ‘moral debt’ claims, conflicts of interest, and agency costs. The four main perceived theoretical arguments against a closed corporation are: The horizon problem; the common-property problem; the non-transferability problem; and the control problem.
Original language | English |
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Pages (from-to) | 318-328 |
Number of pages | 11 |
Journal | Critical Perspectives on Accounting |
Volume | 21 |
Issue number | 4 |
DOIs | |
Publication status | Published - 1 Apr 2010 |
Keywords
- ‘moral debt’
- justice
- residual rights
- employee ownership
- common-property
- open and closed corporations
- finance