The research priority area Corporate governance involves researchers from different subdisciplinary areas within ABS. Corporate governance is of fundamental importance to economic and social progress. Recent institutional level failures during the financial crisis have been attributed to weaknesses in corporate governance. Increasing societal pressure implies that corporate governance is no longer only concerned with financial issues driven by shareholder interests, but also needs to include social and environmental concerns reflecting a much broader set of constituents, embedded in the organisation as a whole. Thus, the research subject of corporate governance now also embraces what we term a crucial sustainability dimension. This sustainability focus explicitly incorporates social and environmental concerns and focuses particular attention on responsible managerial practices and leader behaviours in the governing of organisations, considering the variety of institutional and market contexts in which they operate.
The subject of corporate governance has become highly relevant both in
academic and practical terms, and has broadened to include not only agency-based
notions rooted more in finance, but other dimensions that relate to accounting
and management as well. This is reflected in the academic journals in the
respective fields. While there are different definitions of corporate governance
from such a perspective, we see this, in line with the literature, as focusing
on the relationship between the corporation and their stakeholders that
determines and controls the strategic direction and performance of the
corporation. This involves determining the broad uses to which organisational
resources will be deployed and the resolution of conflicts among the myriad of
constituents, which include directors, managers, employees, shareholders,
customers, creditors, auditors, suppliers, community members and the government.
In a more practical setting, such as corporate governance committees or
international organisations, the reconciliation between economic and social
goals, or put differently, the assurance that companies responsibly manage their
impact on society and the environment, for example through non-financial
disclosures, are explicitly included.