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Required Disclosure and Corporate Governance

Fox, Merritt B.

This article demonstrates that required disclosure can play an important role in corporate governance. It assists shareholders in effectively exercising their voting franchise and enforcing management's fiduciary duties. It also affects positively four of the economy's key mechanisms for controlling corporate management: the market for corporate control, share price-based managerial compensation, the cost of capital, and monitoring by external sources of finance. In so doing, it improves the selection of proposed new investment projects in the economy and the operation of existing facilities. Finally, it may improve managerial performance simply by forcing managers to become more aware of reality.

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Also Published In

Title
Law and Contemporary Problems
DOI
https://doi.org/10.2307/1192228

More About This Work

Academic Units
Law
Published Here
October 14, 2015