Corporate Governance and Finance
The contemporary corporate governance debate is concerned primarily with the design of a legal, institutional and regulatory framework that helps protect weak and widely dispersed shareholders against self-interested managers. Since the relationship between managers and shareholders is characterized as a ‘principal-agent’ relationship, solving this managerial-shareholder agency problem appears to be a long-standing dilemma for publicly listed companies. Lex Research Ltd. not only analyzes the economic and legal problems of these companies, but also recognizes that non-listed companies do not always seem to benefit from the increased corporate governance attention.
Our research will be of special interest to business managers and professional advisors that deal with corporate governance issues. In recent years, corporate governance has become an important topic for both research and business practice. But the discussion has focused on the governance problems of large publicly held firms, although it is well known that closely held firms are the norm for non-listed companies, and in most countries across the world even for large publicly held companies. Moreover, it is well appreciated that the corporate governance of closely held firms differs substantially from that of publicly held firms. If academic research is to inform and improve corporate governance in emerging and transition economies, it is therefore of paramount importance to analyze the corporate governance issues in closely held firms. Lex Research ltd. endeavours to contribute to filling this gap by focusing on corporate governance reforms in markets in which a) closely held firms are particularly common and b) a significant share of the investment resources are directed towards non-listed companies. Moreover, our research highlights company law rules that could improve the performance of closely held firms and creates mechanisms (incentive and information systems) that impede opportunistic behaviour in these companies.