The predominant position of shareholders in firms is gradually declining. A broader stakeholder focussed approach to organisations has become more generally accepted over the last decades. The starting point for this thesis was found in the Dutch Corporate Governance Code which was presented in December 2003 by the Tabaksblat Committee, and in the more recently published advise of the Monitoring Committee Corporate Governance in May 2007. Both documents underpin the Dutch view on the Nature of the Firm, which regards the company as a long-term form of collaboration between the various parties involved. This means that the stakeholder model predominates: the management board and the supervisory board must be guided in their actions by the interests of the company and its affiliated enterprises.
By accepting a stakeholder approach to business organisations the field of corporate governance broadens dramatically. Management has to design a governance model that takes the interests of all relevant stakeholders into account during their decision making process, not only the interests of their shareholders. That means governance structures are needed to coordinate the relationship between that corporate management and a wide range of stakeholders. The governance structures can mitigate the risk of escalation of conflicting interest within relationships between management and stakeholders.
This thesis deals with the subject of stakeholder governance from two theoretical perspectives that both originate from the New Institutional Economics: Agency Theory and Transaction Cost Economics. Based on these theoretical building blocks a preliminary model was defined. This model has been tested and adjusted based on an extensive case study on the Dutch Pension Fund Industry. This has resulted in a descriptive model on stakeholder governance.
About the author Maarten Hage is the head of department of Accountancy Organisation and Integrity within the Policy Supervision Division of De Nederlandsche Bank N.V.
The series Management in Society treats academic and practical subjects in the fields of business ethics and corporate social responsibility, with the aim of deepening theoretical understanding and offering practical support to directors and managers. The series originated from the strategic alliance between the European Institute for Business Ethics, a division of Nyenrode Business Universiteit, and PricewaterhouseCoopers’ Sustainability Solutions Department.
A stakeholders concern
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Acknowledgements
1 Introduction 1.1 Introduction 1.2 Research Approach Objective of the research project Introduction to Grounded Theory 1.3 Research Design Beginning with the end in mind Research Approach
2 Design of the Open Coding Activities
3 First round empirical analysis 3.1 Initial Empirical Analysis on Stakeholder Governance 3.2 Stakeholder Theory 3.3 Stakeholder interaction
4 Stakeholder governance & the Theory of the Firm 4.1 Introduction 4.2 Basis principles of New Institutional Economics 4.3 Theoretical building blocks of the Theory of the Firm 4.4 Concluding remarks on Open Coding
5 Design of the Axial Coding Activities 5.1 Exploration of the Initial Core Categories 5.2 Design of further Investigation during Axial Coding
8 Second round empirical analysis 8.1 Design of the Case Study 8.2 Introduction to the Dutch Pension Fund Industry General introduction to the industry Three types of Pension Funds Relevance of the industry 8.3 Confronting the initial Stakeholder Governance model with the Dutch Pension Fund Industry Validity test of the stakeholder model by applying it to a Pension Fund Validity test of the initial core category 8.4 Concluding Remarks
9 Selective coding activities 9.1 Introduction of the Core Category 9.2 Building on Stakeholder Theory, Agency Theory and Transaction Cost Economics 9.3 Quality of the Core Category as a Descriptive Model 9.4 Concluding remarks on the Descriptive Model
10 Practical implications of the descriptive model on stakeholder governance 10.1 Illustrative example of applying the descriptive model to Stork 10.2 Illustrative example of applying the descriptive model to ABN AMRO 10.3 Practical usefulness of the Descriptive Model for management 10.4 Synopsis
Nederlandse samenvatting (Dutch summary)
Appendix A Descriptive model on stakeholder governance Appendix B Teammate as a tool for the coding process in Grounded Theory Appendix C Interview schedule for the initial empirical analysis Appendix D People interviewed in the initial empirical analysis Appendix E Coding matrix Appendix F Case study protocol
