The economic inefficiency of secrecy: Pension fund investors' corporate transparency concerns [Book Review]
Journal of Business Ethics 63 (4):385 - 405 (2005)
In the wake of recent corporate scandals, this paper traces the growing power of pension funds to provide managerial oversight of the firms they hold in their investment portfolios. Increasingly pension funds are exercising their legitimate rights as owners to raise the corporate governance standards of the firms they invest in. Within corporate governance generally, pension funds are shifting their attention away from managerial accountability and toward measures that increase transparency in firm-level decision-making. Pension funds use transparency to ensure that shareholders are the primary interest being served by the firm. Transparency not only aligns managers and owners, it also raises issues of firm behaviour that allow other stakeholders to engage the corporation more broadly. I contend that secrecy is economically inefficient. When organizations are opaque and interests are secret, decision-making can and does distort efficiency. I examine recent pension fund corporate governance campaigns with particular reference to the California Public Employees Retirement System.
|Keywords||accountability CalPERS corporate governance ethical codes pension funds transparency|
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Citations of this work BETA
Corporate Transparency and Green Management.Vaccaro Antonino & Patiño Echeverri Dalia - 2010 - Journal of Business Ethics 95 (3):487-506.
Black and White Transparency: Contradictions of a Moral Metaphor. [REVIEW]Armando Menéndez-Viso - 2009 - Ethics and Information Technology 11 (2):155-162.
What's Mine is Mine; What's Yours is Mine: Private Ownership of Icts as a Threat to Transparency. [REVIEW]Ronnie Cohen & Janine S. Hiller - 2009 - Ethics and Information Technology 11 (2):123-131.
Responsible Investing of Pension Assets: Links Between Framing and Practices for Evaluation.Darlene Himick & Sophie Audousset-Coulier - forthcoming - Journal of Business Ethics.
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