Abstract
This chapter analyses the changes observed in the corporate governance of companies after privatisation. Specifically, the study focuses on the analysis of how boards change their two main functions – control and provision of resources – when the company is transferred from public to private hands. This serves as a reference to emerging countries that use privatisation as a mechanism for economic development. Regarding the control function, the study shows the key role played by directors appointed before the Chief Executive Officer (CEO) in monitoring managers. This study also establishes the influence of external factors – such as regulation and competition in the sector – on the control function. Regarding the provision of resource role, the results highlight the importance of changing the configuration of the boards after privatisation – in terms of the profile of the directors – in order to acquire the necessary resources in the private stage of the firm. In this respect, the study indicates that directors who are business experts play a greater role after privatisation, and highlights the important presence of support specialists with specific skills at each stage of the company. The study also emphasises the limitations of some variables traditionally associated with the control function – leadership structure (non-duality) and outside directors – and with the provision of resources role – board size.
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Appendix (Survey Items)
Appendix (Survey Items)
1.1 Control Role
To what extent does the board …?
(the response scale ranged from “minimally” 1, until “very much so” 5)
1. | Delegate strategic decision-making to top managers |
2. | Monitor top managers in decision-making |
3. | Formally evaluate the performance of top managers |
4. | Constructively criticise the strategic decisions made by managers |
5. | Request information from the top managers about the company |
6. | Engage in succession planning for the CEO |
7. | Engage in succession planning for top managers besides the CEO |
1.2 Provision of Resources Role
To what extent does the board …?
(the response scale ranged from “minimally” 1, until “very much so” 5)
1. | Provide counsel and advice on business management (decision-making, competitive environments, and so on) |
2. | Provide counsel and advice on legal issues |
3. | Provide counsel and advice on specific issues (financial, insurance, etc.) |
4. | Provide counsel and advice on public relations issues |
5. | Contribute to the prestige and reputation of the firm |
6. | Contribute to legitimising the firm |
7. | Contribute to improving the image of the firm |
8. | Facilitate access to financial resources |
9. | Facilitate access to other resources (other than financial ones) |
10. | Provide communications channels with the government and other public agencies |
11. | Provide communications channels with other firms |
12. | Provide communications channels with non-business organisations (associations, foundations) |
13. | Provide communications channels with other social groups |
1.3 Sector Competition
To what extent do you agree with these statements …?
(the response scale ranged from “strongly disagree” 1, until “strongly agree” 5)
1. | Competitive pressures have led to firms in this industry spending a great deal of money on marketing |
2. | Firms in this industry aggressively fight to hold onto their share of the market |
3. | Competition in this industry is intense |
4. | Firms in this industry follow a philosophy of peaceful coexistence |
1.4 Sector Regulation
Indicate the level of sector regulation on each of the issues below:
(the response scale ranged from “minimally” 1, until “very much so” 5)
1. | Prices |
2. | Production |
3. | Purchasing |
4. | Investments |
5. | Location |
6. | Diversification |
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Guerrero-Villegas, J., Cuevas-Rodríguez, G., Valle-Cabrera, R. (2014). Corporate Governance in Emerging Markets: What We Can Learn from a Privatisation Context. In: Boubaker, S., Nguyen, D. (eds) Corporate Governance in Emerging Markets. CSR, Sustainability, Ethics & Governance. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-44955-0_9
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