This post presents concise summaries of –
1. N. L. Mitra, “Corporate Governance: A Sojourn to Find a Yardstick” (2014)
2. Aleksandar Rašović, “Some Reflections on the Theoretical Concepts Involved in Corporate Governance – The Moral and Philosophical Aspects” (2013)

N. L. Mitra, “Corporate Governance: A Sojourn to Find a Yardstick” (2014)

Mitra frames corporate governance as capitalism’s self-correction in response to public-policy crises rather than a yes/no choice; the question is how to make it effective. In India, concentrated family control, pyramidal group structures, and interlocking trusts complicate accountability frauds and collapses expose the costs of weak governance. The piece traces governance historically: joint-stock corporations arose to pool risk and capital (from East India Company through the South Sea “bubble” and the Bubbles Act), followed by statutory reforms that entrenched separate legal personality and limited liability to fuel industrialization—yet those very legal shields demanded public-interest correctives.

Twentieth-century crises (Great Depression and beyond) provoked debates over directors as trustees for shareholders versus society at large, and ushered in market regulation, disclosure, and professional management precursors to today’s governance agenda. Mitra highlights India-specific headwinds: dematerialization and trader-like retail investing weaken “corporate democracy”; depository structures separate beneficial interest from ownership; promoter-managers often pack boards and influence auditors; and widely held public companies function with thin, short-term shareholder engagement. The upshot is a persistent power tilt toward management/promoters.

On philosophy and models, Mitra distinguishes governance from management and surveys models: the Anglo-American unitary board (with non-executive majorities and committee architecture), the European dual board (supervisory + management boards with employee/lender voice), Japan’s multi-stakeholder variant, and India’s historical “managing agency” legacy that entrenched opaque, family-centric control. He argues governance rests on two pillars—allocation/checks of power and social accountability—with CSR sitting largely outside governance’s core (a matter of corporate conscience rather than control architecture).

Turning to Indian law, Mitra reads the Companies Act, 2013 as a partial step: it codifies independent directors (eligibility, tenure, cooling-off, separate meetings), strengthens audit committees, and creates NFRA for audit/standards oversight; yet the Act leaves the basic AGM-centric “corporate democracy” intact—insufficient in a market of dispersed, short-term holders. He details auditor rotation, cooling-off, and conflict-of-interest disqualifications as structural safeguards, and notes CSR (s.135) as statutorily mandated but conceptually outside governance’s core.

In conclusion, Mitra favours a dual-board style separation of policy control from day-to-day management, stronger independent oversight (auditors, NFRA), empowered institutional investors, and regulator capacity to audit governance compliance. The enduring challenge in India is to counteract promoter domination and short-termism with credible checks, transparency, and multi-stakeholder representation so that public companies genuinely serve public capital and the wider economy.

Aleksandar Rašović, “Some Reflections on the Theoretical Concepts Involved in Corporate Governance – The Moral and Philosophical Aspects” (2013)

Rašović offers a conceptual genealogy of corporate governance anchored in ownership, rights, and control. Beginning with the evolution from clan societies to the state, he uses Plato, Smith, and Marx to show how division of labour and the emergence of private property re-shaped social structures and created the preconditions for firms. Property rights, he argues (drawing on Roman law, Marx, de Soto, and Bastiat), are the institutional backbone of efficient enterprise: well-defined, legally protected private property enables accountable actors, market exchange, and ultimately the ownership-based control that governance must organize.

Historically, joint-stock companies and capital markets co-evolved (from the Dutch East India Company to London/Paris exchanges), and governance failures often sat at the root of crises—from the 1929 crash to Enron/WorldCom and 2008—prompting regulatory waves (e.g., the US Securities Acts, Sarbanes-Oxley) and global code-making. This entwined history of corporations and capitalism underscores why boards, disclosure, and oversight matter for systemic stability.

On theory of the firm, Rašović synthesizes Coase (firms internalize transactions to economize on transaction costs), Williamson (the firm as a governance mechanism), and Drucker (organizational structure and change). Firms exist under uncertainty, and their contractual webs need not conflict with governance; rather, governance is the meta-contractual system that aligns roles, incentives, and monitoring so organizations can adapt in an ICT-driven era.

The moral-philosophical strand asks to whom corporations belong and what ends they serve. Citing Friedman, Rašović frames the default as profit-seeking within law and ethical custom, while noting critiques (e.g., Bakan) of the corporation’s “pathological” pursuit of profit and the cultural-institutional diversity (EU traditions) that contextualizes governance aims. He emphasizes that governance embodies a society’s “contract” among state, firms, individuals, and stakeholders, and that ethics shape the decision environment even if economics does not decide morality.

A core practical problem is the separation of ownership and control. From Smith’s warning about managers of “other people’s money” to Weber’s case for professional management, modern corporations disperse risk and decision rights, generating agency problems:
(1) shareholders vs. managers;
(2) majority vs. minority shareholders; and
(3) controllers (or the state) vs. other stakeholders.

Governance via boards, audits, risk controls, disclosure, and minority rights protections—exists to mitigate these conflicts, align incentives, and legitimate corporate power. The 2008 crisis, he notes, exposed two failed mechanisms in particular: risk-management/audit systems and boards separated from real ownership influence.

Rašović’s takeaway is normative and institutional: robust private property, credible investor protections, and fit-for-purpose organizational design are prerequisites to sound governance; absent these, concentrated power, weak oversight, and agency costs imperil both firms and markets.