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Changes to Cengage Edition "Corporate Governance. A Global Perspective"

The Cengage edition entitled "Corporate Governance. A Global Perspective" is an improved and updated version of "International Corporate Governance" published by Pearson Prentice Hall in 2012. The table of contents of the Cengage edition can be found here. The Cengage edition was published in spring 2018.
Changes to Cengage Edition
The structure of the textbook has changed to improve the flow throughout the book. Part II, which used to be entitled “International Corporate Governance”, is now called “Macro Corporate Governance”. Parts III and IV have been swapped around to improve progression through the book. Chapter 5 on “Incentivising Managers and the Disciplining of Badly Performing Managers”, which used to be in Part II, has been moved to Part III. A new chapter, Chapter 7 on “Boards of Directors”, including some of the material which used to be in old Chapter 5, has also been added to Part III. Throughout the book, many of the case studies in the textboxes have been replaced with more up-to-date material. In addition, errors, omissions and inaccuracies that were spotted by the author and various users of the text have also been corrected. The glossary has also been updated to include terminology used in the new material.
While it is not feasible to provide an exhaustive list of all the changes made, in what follows I provide a summary of the main changes made to each chapter. The definition of corporate governance in Chapter 1 – which is used throughout this book – now distinguishes between four types of conflicts of interests rather than just three. Indeed, the conflict of interests between the providers of finance and the managers has been broken up into the conflict between the shareholders and the managers and the conflict between the shareholders and the debtholders. The definitions of ownership and control have also been clarified and the discussion of the agency problem of debt has been improved. Finally, an appendix has been added to Chapter 1. The appendix contains an extensive discussion of the theoretical framework underlying the Jensen and Meckling (1976) paper.[1] Chapter 2 has benefited from extensive updating wherever feasible and pedagogically defensible. Importantly, a trade-off had to be made between reporting the most recent figures on corporate control for each region on the one side and ensuring that the figures are detailed enough and are based on ultimate control to enable a comparison with other studies on the other side. The case studies in Chapter 3 have been updated. The statistics in Chapter 4 have been updated to the latest figures available. Section 5.5 in Chapter 5 (which used to be Chapter 6) has been renamed to reflect the section’s focus on country trust. Chapter 6 on corporate governance regulation has been extensively updated to reflect recent developments and changes in regulation and codes of best practice. It also now includes a new section (Section 6.5) with brief summaries of the regulatory approach and focus in China, Japan, Germany and India. The section on positive discrimination has been moved to the new Chapter 7 on boards of directors in Part III. This material, which has been extensively updated, can now be found in Section 7.6 on board gender balance and board diversity. Finally, a new section, Section 7.5, on the market for directors has been added to the same chapter. Chapter 8 (old Chapter 5) now focuses on all previously included corporate governance mechanisms, except for the board of directors which again is now the focus of new Chapter 7. Chapter 11 on IPO firms (old Chapter 14) has now an additional section (Section 11.7) on the specific corporate governance needs of IPO firms and how these differ from those of more mature firms. Various sections of this chapter have also been updated to reflect recent developments in academic research. The Chapter Aims and Learning Outcomes of Chapter 12 on the behavioural biases (old Chapter 15) have been rewritten to make the link between behavioural biases and corporate governance more obvious. Section 12.7 has been extensively updated to reflect recent advances in research on the effects of gender and age on corporate governance. Chapter 13 (old Chapter 8) on CSR and SRI has also benefited from a number of fairly major updates (see Sections 13.2 and 13.4). The chapter also now summarises the United Nations’ Principles of Responsible Investment (PRI). Finally, Section 15.5 on employee board representation of Chapter 15 (old Chapter 10) now includes a discussion of the most recent literature on the subject.

The book can be ordered from Blackwells.




[1] Jensen, M. and W. Meckling (1976), ‘Theory of the Firm: Managerial Behavior, Agency Costs and Capital Structure’, Journal of Financial Economics 3, 305–360.

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