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Corporate Law and Governance Review, Volume 3, pp 4-6; https://doi.org/10.22495/clgrv3i1editorial

Abstract:
Corporate governance and corporate law cover a wide range of eminent topics for the effective governance system. The articles published in this issue have focused particularly on the board configuration, commercial code regulations about the managers’ decision and compensation, the comparative perspective of the common law rule on pre incorporation contracts, and the responsibility of the company with the authorized fictitious capital from the evidence of emerging markets. Moreover, this issue includes a book review of the theoretical, essential, and international practices of corporate governance, which consists of various timely and interesting concepts, such as the role of institutional investors in corporate governance, the board of directors’ impact on performance and the role of non-executive directors, the audit function and the role of regulation international corporate governance, and socially responsible investment, etc.
José Manuel Bernardo Vaz Ferreira
Corporate Law and Governance Review, Volume 3, pp 53-57; https://doi.org/10.22495/clgrv3i1p5

Abstract:
This review covers the textbook titled “Corporate governance: Theoretical essentials and international prectices”, authored by Aws Alhares and Naser Ibrahim Abumustafa (Virtus Interpress, 2021; ISBN: 978-617-7309-17-7). The review focuses particularly on the relationship between corporate governance and financial structure, the role of institutional investors in corporate governance, the board of directors’ impact on performance and the role of non-executive directors, the audit function and the role of regulation international corporate governance, and socially responsible investment. It also highlights the contribution of this textbook to the ongoing discussion on key points relating to corporate governance
Yalid Yalid, Ryan Aditama, Sindi Sindi, Husni Tamrin, Iswandi Iswandi
Corporate Law and Governance Review, Volume 3, pp 43-52; https://doi.org/10.22495/clgrv3i1p4

Abstract:
The phenomenon of law related to the capital subscribed and fully paid up company is limited liability companies in Indonesia, many of which are not real. The aim of this research is to answer the question: "What is the legality and legal consequences of an establishment with a fictitious authorized capital?". The research was conducted via the study of literature with this type of normative legal research supported by an empirical approach. The results of the research contribute to knowledge that the responsibility of a limited liability company with a capital payment basis is fictitious when the establishment does not essentially meet the validity of the establishment of the limited liability company itself, whether based on terms “materially” or “formally”. The terms formilnya (“formally”) depositing of the authorized capital must be issued and paid-up in full. Although the capital is fictitious or not real, if it has been approved by a legal entity, then it remains as a legitimate legal entity, but the substance of it is a limited liability company. Depositing the authorized capital which is not real contradicts the nature of the limited liability company as a legal entity
Wiseman Ubochioma
Corporate Law and Governance Review, Volume 3, pp 29-42; https://doi.org/10.22495/clgrv3i1p3

Abstract:
The question of how best to protect the interests of a promoter, a third party, and a company in pre-incorporation contracts is one that seems to have defied corporate law. Although this problem has its origin in common law, various countries have made efforts to address it through statutory reforms. The paper, therefore, examines the extent to which the Canadian and Nigerian legal regimes for the pre-incorporation contract have provided panaceas to the problem. This paper, through a comparative analysis, argues that although the legal regimes have made efforts to reform the common law rule on pre-incorporation contracts, they suffer patent defects. It also posits that notwithstanding the defects in the laws, the Canadian legal regimes offer more protection to parties to pre-incorporation contracts than Nigerian law. The paper suggests reforms in both regimes that would meet the reasonable expectations of the parties to a pre incorporation contract
Shu Li
Corporate Law and Governance Review, Volume 3, pp 17-28; https://doi.org/10.22495/clgrv3i1p2

Abstract:
This article aims to reveal the three trajectories of establishing the two-tier model and select Germany, Italy, and China to discuss the ontology of the two-tier model, its integration with other local models, and its development variants. This article compares the similarities and differences of the two-tier model in the organizational structures of three countries to show that there is institutional inertia or path dependence in the design of legal systems and rules on corporate governance. In the two-tier model, the management agency performs the corporate business, the supervisory agency supervises the corporate operations, and the relationship between the management agency and the supervisory agency is subtle and complex. Germany is the original user of the two-tier model. Italy introduced the two-tier model as an optional model in addition to the traditional model. China is learning from the world’s experience and establishing its own two-tier corporate structure based on its own conditions. As Buck and Shahrim (2005) mentioned, cultural traditions, historical development paths and models, the overall development level and maturity of the market economy, social legal awareness, and the improvement of the rule of law influence the corporate governance structure that the country chooses to adopt
Işik Özer
Corporate Law and Governance Review, Volume 3, pp 8-16; https://doi.org/10.22495/clgrv3i1p1

Abstract:
Article 625/2 of the Turkish Commercial Code (TCC), adapted from the Swiss Code of Obligations (Obligationenrecht 811, hereinafter referred as OR 811), allows managers to submit certain decisions and individual matters to the approval of the general meeting. This paper purports to reveal how this article could be interpreted and the regulations to be made in the agreements of limited liability companies in Turkish law. To do that, an interpretation of article 625/2 of TCC is developed. In addition, the effect of this article on the liability of the managers and the references made to articles 51 and 52 of the Turkish Code of Obligations (TCO) are explained. With a regulation added in the agreement of the company, the managers would either be required to submit or they would be free to choose to submit certain decisions and individual matters to the approval of the general meeting. Considering that the submission slows down the decision-making process and causes additional costs, granting the managers the right to choose becomes an important issue. However, the approval of the general meeting does not remove the liability of the managers. So when a lawsuit for liability is filed against managers, the approval of the general meeting may decrease the payment for compensation (articles 51 and 52 of TCO)
Corporate Law and Governance Review, Volume 2, pp 4-6; https://doi.org/10.22495/clgrv2i2editorial

Abstract:
This new issue contains four contributions that geographically extend from Tunisia to Germany, China, and post-colonial countries like Kenya and Uganda. This witnesses the international scope of corporate law and governance and its scalable worldwide applicability, eased by local fine tuning. In spite of this geographical common denominator, the papers evidence spicy differences in their research targets.
Fred Amonya
Corporate Law and Governance Review, Volume 2, pp 47-54; https://doi.org/10.22495/clgrv2i2p4

Abstract:
Crises force us to stop and think. And COVID-19 should. This paper examines the prospect of deep reform of national planning in the young post-colonial states (the moulding states). The paper is a contrasted case study of Kenya and Uganda. The attempt at generalisation across moulding states draws on a shared history of state formation. Two trunks define that history – post-independence conflicts and structural adjustment programme (SAP). A contrast between the two countries teases out a tension, which tension the paper uses to illuminate the two policy spaces. The analytical frame draws on control theory. The paper argues that neither country is likely to see structural reform of their national planning. Yet, the epistemological thrust of the paper is not that deduction but questions arising along with the scrutiny of the policy spaces. Those questions should provoke Africa and more broadly, the emerging economies
, Ute Schottmüller-Einwag
Corporate Law and Governance Review, Volume 2, pp 18-32; https://doi.org/10.22495/clgrv2i2p2

Abstract:
We examine how corporate governance reporting corresponds to actual conduct regarding severance payment caps for prematurely departing members of executive boards in Germany. Firstly, we evaluate the declarations of conformity for all companies listed in the CDAX between 2010 and 2014, which we use to determine conformity and deviation rates, and analyse the reasons for deviation, contributing to current research on comparative corporate governance, which focuses on when, why and how companies deviate from legitimate corporate governance goals (Aguilera, Judge, & Terjesen, 2018). Secondly, we assess the compensation amounts of all severance payments made and published by DAX companies to compare the respective severance ratio with the cap recommended by the German Corporate Governance Code (GCGC). We find that more than 20% of companies listed in the CDAX declared deviation in the declaration of conformity. Moreover, in 57% of actual severance cases where DAX companies had previously declared their conformity, the cap was exceeded. Yet, none of the companies that had exceeded the cap disclosed this in the following declaration of conformity. In most cases, the corporate reports deviated from reality and therefore could not serve as a suitable basis for decisions by the capital market.
, Lamia Jamel, Ali Lamouchi, Ahmed K Elnagar, Monia Ben Ltaifa
Corporate Law and Governance Review, Volume 2, pp 8-17; https://doi.org/10.22495/clgrv2i2p1

Abstract:
The board of directors plays a crucial role as an internal structure of corporate governance. Certainly, its efficiency is needy on the existence of numerous issues; the greatest significance is correlated to its characteristics that relay principally to the individuality of its memberships, board dimension, combining the purposes of pronouncement and regulator as well the grade of the individuality of the audit board and the diverse gender of the committee. To assess the authenticity of our assumptions, which stipulate the presence of deterministic characteristics of the committee on the profitability of Tunisian banks, we evaluated by three different ratios i.e., ROA (return on asset), ROE (return on equity), and MP (market performance); and we estimate three models with linear regressions. The empirical findings were performed on a data sample composed of 11 Tunisian banks listed on the Stock Exchange of Tunisia (SET) during the period from 1999 to 2018. From the estimated regressions, we find a satisfactory outcome indicating the significance of the influence of the characteristics of the committee on the banking performance in Tunisia. Then, the percentage of outside directors negatively affects the level of the financial performance of banks. The number of institutional administrators performs an essential role in improving financial performance. Finally, the duality of the Presidency of the Council General-Directorate has a negative effect on the level of stock market performance of Tunisian banks.
José Vaz Ferreira
Corporate Law and Governance Review, Volume 2, pp 4-6; https://doi.org/10.22495/clgrv2i1editorial

Abstract:
Nowadays, corporate governance is a classic subject of discussion for policymakers and academic researchers worldwide. The interest of this research topic may be explained for the increased demand for continuous improvement and transparency in the board of directors and contributing to the previous research by Ravaonorohanta (2020), Hassan, Karbhari, Mohamad Isa, and Ab Razak (2017), Bianchi Martini, Corvino, and Rigolini (2012), Kyereboah-Coleman and Biekpe (2006), Davidson and Rowe (2004), and Kostyuk (2003).
, Maria Clara Guilherme, Nuno Teixeira
Corporate Law and Governance Review, Volume 2, pp 42-54; https://doi.org/10.22495/clgrv2i1p4

Abstract:
Corporate governance is not a new topic but has become more relevant in the last years due to the financial crisis of 2008, when diverse companies went to bankruptcy, and investor’s protection was weakened. Thus, diverse countries have revised corporate governance mechanisms and recommendations to restore the confidence of investors and the transparency of companies’ financial reports. This work aims to explain the evolution of corporate governance practices in Portugal. We provide information on corporate governance’ legal framework. Then we explain ownership structures and board of directors’ and directors’ remuneration practices. Shareholders’ rights and activism are also explained. Finally, we linked the topic of corporate governance and companies’ performance and social responsibility. This work contributes to increasing literature review on corporate governance practices, by presenting the evolution of corporate governance practices in a specific country, Portugal.
Martha Okigbo, Mahmood Bagheri
Corporate Law and Governance Review, Volume 2, pp 27-41; https://doi.org/10.22495/clgrv2i1p3

Abstract:
Since bank failures and its systemic and contagion effects have become an issue, various ex-ante and ex-post solutions have been contemplated and put forward to tackle the bank failure or and to manage its consequences. Among the ex-ante measures to tackle and avert the excessive risk-taking by banks, regulatory intervention through mandatory capital adequacy as exemplified in the Basel Accords, has been popular. However, even the most recent arrangements for implementing the capital adequacy standards have not been very successful leading to regulatory failures. Bank failures not only inflict costs and losses to the shareholders and depositors of the bank, the managers of which take excessive risk, but also the contagion effects mean the losses are extended to the banking system and the society at large. In this paper, we are proposing an ex-ante private law mechanism through the reform of company law rules to stop excessive risk-taking by the bank managers, and therefore avoiding the systemic risk which has far more ramifications for society as a whole. The solution we are proposing is rather a corporate governance scheme under which a two-tier management regime consisting of a supervisory board and management board. As it has been the feature of German company law, the supervisory board allows stakeholders of the bank including depositors and central banks, employees and creditors, to participate in the management of the company and control the executive members of the board in terms of the level of risk-taking. This ex-ante mechanism as a private law measure is theoretically more effective and less costly compared to regulatory schemes.
Hugh Grove, Mac Clouse, Tracy Xu
Corporate Law and Governance Review, Volume 2, pp 18-26; https://doi.org/10.22495/clgrv2i1p2

Abstract:
The key research question of this paper is to explore the major implications for corporate governance from the emergence of long-term stockholder and stakeholder value perspectives for the purpose of a corporation. The major implication for corporate governance is the significant opportunity for boards of directors to play a vital role in helping companies create long-term sustainable value. An initial step is to develop a clear understanding of the company’s business strategy and how long-term value is created through innovation and deployment of resources. Boards of directors need to understand what really creates long-term value in their companies and then make sure their companies develop ways to measure and manage such value in order to be able to “govern like owners” and fulfill their fiduciary roles. To facilitate this fiduciary role, McKinsey & Company’s Corporate Horizon Index with its five key indicators, investment, earnings quality, margin growth, quarterly management, and earnings-per-share growth, and their related hypotheses and measurement approaches can be used as a roadmap.
Tshegofatso Kgarabjang
Corporate Law and Governance Review, Volume 2, pp 8-17; https://doi.org/10.22495/clgrv2i1p1

Abstract:
There are fundamental challenges encountered by the non-executive directors (board members) of state-owned entities in a course of exercise of fiduciary duties. These challenges are, inter alia, conflict of interests, failure to uphold the fundamental principles of corporate governance, lack of necessary skill and competencies, and this impact on the ultimate performance of the company. The article seeks to evaluate the potential challenges encountered by board members of state-owned entities in the course of exercise of their fiduciary duties. The results indicate that failure to comply with fiduciary duties may have drastic effects on a state as a shareholder and may lead to a decline in corporate governance of state-entity. The article will make a brief reference to fiduciary duties in terms of common law, the Companies Act, PFMA and King IV, secondly examine potential challenges and thirdly conduct a comparative approach with the international instruments with the aim of making recommendations/best practices. The article makes reference to various case laws dealing with fiduciary duties, journal articles, internet sources and textbooks, common law and legislations.
Corporate Law and Governance Review, Volume 1, pp 4-6; https://doi.org/10.22495/clgrv1i2_editorial

Abstract:
Corporate social responsibility is still an emerging issue both for practice and research. There are many researchers who investigated this issue in details with regard to various factors including industry, country, culture, company size, etc. (Trong Tuan, 2012; Khan, 2010; Silberhorn & Warren, 2007). This issue of the journal contributed enough to the results of previous research and outlined horizons for future research too
Khaled Otman
Corporate Law and Governance Review, Volume 1, pp 62-73; https://doi.org/10.22495/clgrv1i2p6

Abstract:
This study investigates the board directors and their effect on company performance in emerging markets, particularly in the United Arab Emirates (UAE). Our findings robustly confirm that the UAE has adopted a board structure similar to that of Western countries. The results indicate the positive effects of leadership structure, board composition and audit committee independence on company performance. This is the first study to demonstrate that board structure is an important determinant in reducing agency problems and leading to improved company performance in unique ownership structures in emerging markets, such as exist in the UAE. It is also the first study to explore the board structure-firm performance relationship using a system-generalised method of moment’s estimator for the UAE market. The regulatory and policy implications suggested in this research are significant, not only for the UAE but also for application to other emerging markets. In this context, clear insights are provided for policymakers, regulators, managers, investors, and researchers involved in emerging markets.
Philmore Alleyne, Renée M. Thompson
Corporate Law and Governance Review, Volume 1, pp 51-61; https://doi.org/10.22495/clgrv1i2p5

Abstract:
Good corporate governance practices are regarded as important in reducing risk for investors, attracting investment capital and improving the performance of companies. This paper investigates the relationship between corporate governance practices of the board of directors and firm performance of Colonial Life Insurance Company (CLICO), a large insurance company which collapsed in Barbados, and caused significant financial losses to policyholders. Using a case study approach, we used information from publicly available documents via print media and the internet to research the corporate governance practices and performance of CLICO. Findings reveal that the collapse of CLICO was a result of poor corporate governance mechanisms including lack of board independence, CEO and Chairman dual relationship, poor regulatory environment, non-functioning sub-committees, failure to manage risks, interlocking directorship, political involvement and lack of diversity. Recommendations include effective regulation, separation of the roles of CEO and Chairman, reduced political interference and more diversity.
Raef Gouiaa
Corporate Law and Governance Review, Volume 1, pp 42-50; https://doi.org/10.22495/clgrv1i2p4

Abstract:
Emerging from the agency theory, corporate governance is the practice of ensuring a corporation conducts itself accountably, fairly and openly in all its dealings. The achievement of corporate performance relies on the mechanism efficiency of Corporate Governance both internally and externally. This study is intended to review the Canadian legal and practical landscape related to corporate governance and its external and internal mechanisms. One of the main goals of corporate governance is to ensure a company’s executives are managing the finances effectively and that they always act in the best interest of stakeholders. Canada passed a law in 2003 to strengthen corporate governance. Based on the U.S. Sarbanes-Oxley Act (SOX), this Canadian law aims to create confidence in the Canadian market and protect investors from corporate scandals. Corporate governance mechanisms can be divided into internal and external mechanisms. The internal mechanism is essentially derived from the board of directors and its committees whereas the external mechanism is derived from laws and regulation, capital market, corporate control market, stock holders (ownership structure), and investor activities. The balance and effectiveness of the corporate governance mechanisms can create a better corporate financial performance.
Mark Rix
Corporate Law and Governance Review, Volume 1, pp 29-41; https://doi.org/10.22495/clgrv1i2p3

Abstract:
This paper investigates the changing duties and responsibilities of boards and directors of Australian public companies. The corporate governance environment in Australia is currently going through a period of significant transformation raising the question of whether in this fluid and shifting environment company and board performance can still be assessed largely on the basis of profit, share price and dividends generated over the short term. These almost certainly will continue for some time to be the key metrics of company and board performance and it is hard to see how it could be otherwise. Nevertheless, a growing chorus of influential stakeholders is calling for the introduction of a more balanced and comprehensive suite of performance indicators that better reflect the realities of corporate governance early in the Twenty-first Century. The paper examines how these stakeholders are reshaping corporate governance in Australia and also calling for a reconsideration of the way in which performance is assessed.
Gábor Szalay
Corporate Law and Governance Review, Volume 1, pp 21-28; https://doi.org/10.22495/clgrv1i2p2

Abstract:
The conceptual elements of transparency in the business sector and the transparent management of companies became even more desired features as a result of the rapid technological advancements we are witnessing especially after 2010. With the global spread of social media and online platforms, the networked and digital age is a new environment where companies have to adapt in order to be efficient, and their corporate governance policies have to be tailored to fit the new requirements. In such environment, the strengthening of the transparency principle is essential also through the examination and comparison of prominent cases, through which the conclusions drawn contribute in fostering the appropriate future use of corporate governance policies and increasing social responsibility with respect to the functioning of the participants of the business sector. The aim of the paper is to highlight the possible adverse effects of the lack of transparency exerted on corporate governance.
Corporate Law and Governance Review, Volume 1, pp 8-20; https://doi.org/10.22495/clgrv1i2p1

Abstract:
Previous research suggests that boards of directors influence firm performance due to their role in activities such as strategic design and its implementation. From this perspective, many corporate governance researchers have tried to demonstrate empirically the impact of board characteristics on firm performance in different contexts. In this context, the objective of this work is to disclosure proven relationships between board governance variables and firm performance based on an analysis of relevant studies in Spain. Before a review of the relevant literature, we provide a legal overview of Spanish corporations and an analysis of corporate board practice in Spain (paying special attention to the composition of the boards of directors, the duality of the CEO and Chairman, gender diversity on boards and directors with multiple directorships). Following this, the analysis of the literature was carried out. The results show that in the majority of studies independent directors and CEO/Chairman duality have no relationship with firm performance. However, the proportion of women on the board of directors does show a positive relationship with firm performance. For the variable busy director, no conclusion can be established because the evidence found is scarce. We can conclude, therefore, that as a result of the inconclusive results as well as the scarcity of the study of some aspects for this field of study, further research on the relationship between the board and firm performance is necessary in the Spanish context.
Corporate Law and Governance Review, Volume 1, pp 4-6; https://doi.org/10.22495/clgrv1i1_editorial

Abstract:
The first issue of the journal “Corporate Law & Governance Review” is devoted to the issues of convergence of corporate governance towards intrinsic value, the impact of 4.0. innovation and regulations in the labour market, the effects of law and regulation on Italian corporate board practices in Italy and the board specificities in listed Portuguese firms.
, Joaquim Neiva Neiva
Corporate Law and Governance Review, Volume 1, pp 41-57; https://doi.org/10.22495/clgrv1i1p5

Abstract:
The corporate governance is a mechanism to protect investors in the markets around the world. This study analyses the board of directors’ specificities in the context of Portuguese Corporate Governance, and study the corporate governance effect of Portuguese listed firms on firm performance. The results show that the Latin Model (Two-Tier Model) is the most (least) adopted by Portuguese firms. The percentage of executive members is higher than that of non-executive members. In the year of 2014, women held only 9.5% of positions on board, which is very low. The results concerning the relationship between corporate governance and firms’ performance are not consensual. Although some studies find evidence of a positive relation between the two variables, others find no relationship. With this study, we contribute to the state of art of corporate governance in a country which investigation is still scarce.
Souad Adnane
Corporate Law and Governance Review, Volume 1, pp 36-40; https://doi.org/10.22495/clgrv1i1p4

Abstract:
The District of Columbia (DC) Office of the Superintendent of Education (OSSE) issued in December 2016 new educational requirements for childcare workers, according to which, all childcare center directors in the District must earn a bachelor’s degree by December 2022 and all lead teachers an associate’s degree by December 2020 (Institute for Justice, 2018). Moreover, DC has one of the lowest staff-child ratios in the country. How are regulations pertaining to childcare workers’ qualifications and staff-child ratio affecting the childcare market in DC? The present paper is an attempt to answer this question first by analyzing the effects of more stringent regulations on the cost and availability of childcare in the U.S based on existing studies. It also uses the basic supply and demand model to examine the possible impact of the new DC policy on the cost, quality and supply of childcare in the District and how it will affect working parents, especially mothers. Next, the paper discusses the impact of deregulation based on simulations and regressions conducted by studies covering the U.S., and implications for quality. It concludes that more stringent childcare regulations, regarding educational requirements and staff-child ratios, are associated with a reduced number of childcare centers and a higher cost, and eventually affects women’s labor force participation.
Carlo Caserio, Sara Trucco
Corporate Law and Governance Review, Volume 1, pp 24-35; https://doi.org/10.22495/clgrv1i1p3

Abstract:
This paper proposes an extensive analysis of corporate governance and corporate board practices in Italy, under different perspectives. First of all, through a literature review, the research aims to analyze the main effects of laws and regulations on corporate board practices in the Italian setting by taking into account the most important corporate board models in different types of companies. This study also highlights the different functions and responsibilities assigned to the boards, bodies and boards’ members, according to the governance system implemented – classic/traditional, dualistic, monistic. For each of these systems, the main issues are presented and the most important critical points are illustrated. Regarding the functions and the responsibility of the board members, the link between the board governance and company performance is discussed on the basis of the main literature, as well as the laws concerning the participation of women to the boards’ activities. Furthermore, the effects of gender diversity on company performance is analysed taking into account the main studies on this topic. Finally, the paper presents some conclusions and future research areas on the aforementioned topics: it proposes future empirical analysis on the effects that different governance systems, different board compositions and different roles of directors, as required by the law, may have on the performance of listed/unlisted companies and on family/non-family companies.
Francesco Di Tommaso, Arturo Gulinelli
Corporate Law and Governance Review, Volume 1, pp 16-23; https://doi.org/10.22495/clgrv1i1p2

Abstract:
The intent of the paper is to understand which new scenarios and future figures could emerge with the Corporate Governance Industry Revolution 4.0, but also which professional figures could disappear, decrease in number or transform; also prefigure what changes could occur in the way of work performance, of new and old professions, in relation to the inevitable changes in production processes that will be introduced by this new industrial revolution. My point of view, of analysis, is clearly that of union representation, in all forms, and of workers. The question that I and I hope all the components of the trade unions are asking is: will we be able to be able to understand, represent and protect all the workers who will be involved in Industry 4.0? Clearly the writer does not pretend to find solutions, although from my observations, experience of representation can certainly provide suggestions and ideas, aided by the study and research still conducted by the major unions such as: CGIL-FIOM, CISL- FIM and UIL-UILM in Italy.
Hugh Grove, James C. Lockhart
Corporate Law and Governance Review, Volume 1, pp 8-15; https://doi.org/10.22495/clgrv1i1p1

Abstract:
The major research question addressed by this paper is how to evolve corporate governance beyond its traditional shareholder focus towards the broader perspective of a stakeholder focus with intrinsic value. Intrinsic value refers to the monetary value of a company, stock, currency, or product determined by fundamental analysis, without reference to extant market value. It is ordinarily calculated by summing the discounted future income generated by the company, stock, currency or product to obtain its present value. In this paper we observe the evolution of corporate governance towards an intrinsic, long-term value focus by the boards of directors, corporate executives, owners and shareholders, regulators and legislators, and other stakeholders. These major players are encouraged to develop more wisdom in order to assess the emerging threats, challenges, and opportunities from technology for intrinsic value, especially with the perspective of the public corporation as a separate legal personhood, as advocated by the European Parliament’s Committee on Legal Affairs in 2015. The rapid increase in the development of artificial intelligence (AI) and other technologies has tremendous significance for these major players broadly contributing to effective corporate governance. To facilitate the development and evolution of intrinsic value for public corporations and other entities, these major players need wisdom for more effective corporate governance in challenging times. Accordingly, this paper discusses the evolution of corporate governance and board members’ perspectives from a shareholder focus to a stakeholder focus with intrinsic value; the key success factor being wisdom for boards; the three-dimensional wisdom scale; and, the AI challenge, including the “Deadly Soul” of a new machine, to the wisdom of company executives and their boards of directors.
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