Taking Care of Executive Legitimacy: A Neglected Issue of Corporate Governance
Reducing the mandate of top executives— and the broader undermining of top management functions—is no longer a good governance practice but rather an indicator of a crisis: that of the legitimacy of top management teams.
The reforms in corporate governance that were initiated in the 1990s and have accelerated in the current decade have contributed to a greater balance of power between shareholders and top executives, in particular by strengthening measures designed to keep the latter in check. Left to develop unchallenged, however, these reforms could weaken companies by denying their top management teams the chance to build up sufficient legitimacy to govern.
Companies can no longer afford to be without strong and competent top management; this is why it is time to consider the legitimacy of top management teams, this much-neglectedand even mishandleddimension of corporate governance.
| Type: | Position paper |
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| Date: | le 10/01/2009 |
| Extra information : |
For more information, please contact Séverine Anjubault, EDHEC Research and Development Department [ severine.anjubault@edhec.edu ] |
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Operating from campuses in Lille, Nice, Paris, London and Singapore, EDHEC is one of the top 15 European business schools. Fully international and directly connected to the business world, EDHEC is a school for business, rather than a business school, where excellence in teaching and research focuses on innovation to stimulate entrepreneurship and creativity. EDHEC functions as a genuine laboratory of ideas and produces innovative solutions valued by businesses. The School’s teaching philosophy, inspired by its award-winning research activities, focuses on “learning by doing”.
