A Closer Look at Business Education
: CORPORATE GOVERNANCE
Corporate governance (CG) is one of the most talked about topics in business, indeed in society, today. A
Google search revealed 513 news citations during a single week in June 2006. Most academics, business
professionals, and lay observers would agree that CG is defined as the general set of customs, regulations,
habits, and laws that determine to what end a firm should be run. Much more fraught, however, is the
question: “what defines good corporate governance?”
It is clear that CG exists at a complex intersection of law, morality, and economic efficiency. Less clear,
however, is the extent to which current MBA education reflects that complexity. CG is usually not a
distinct academic discipline, but integrated into other courses. Considering that issues of executive
compensation, financial scandals, and shareholder activism are all tied up with CG, its teaching is a topic
This Closer Look takes a broad view of the topic, with the goal of addressing the following questions:
■ What are the key issues in CG, as regards business’ social and environmental impacts and
■ How do leading thinkers perceive the issue?
■ What is the current state of practice on MBA campuses?
■ What teaching resources are available to business school faculty?
A FACULTY POINT OF VIEW:
Michael C. Jensen is an Emeritus Professor at Harvard Business School. In 1973 he founded the Journal
of Financial Economics and in 1994 he co-founded the SSRN website. Dr. Jensen has published
prolifically, received numerous awards, and is widely considered to be a leading