Document Type

Article

Comments

Monitoring, Corporate Performance: The Role of Objectivity, Proximity and Adaptability in Corporate Governance (with Arnoud Boot), 89 Cornell Law Review 356 (2004)

Abstract

This Article identifies the fundamental tradeoff faced by individuals, firms and institutions that monitor corporate management's performance. This tradeoff, between objectivity in monitoring and proximity in monitoring, is central to the corporate governance debate. Proximity exists when monitors maintain close contact with management and participate in important decisions on a real-time basis. Objectivity exists when monitors, such as hostile acquirers, analysts, credit rating agencies, accounting firms, and outside lenders, remain distant from management and evaluate management's performance without influence by management.

Date of Authorship for this Version

2004

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Law Commons

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