Governance and corporate control in the United States

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Abstract

This paper provides an overview of business entities in the United States. We analyze current trends in the ownership structures of U.S. firms, diversity and inclusion, mergers and acquisitions, minority shareholder rights protections, and review the literature related to corporate ownership and financial performance. With the shift in the U.S. from defined benefit pension plans to defined contribution plans and a desire for increased corporate governance, we observe a significant increase in the financial assets under management by large institutional investors. It is believed these large institutional investors can have a significant impact on the governance, decision-making, and performance of the U.S. publicly traded firms. We observe an increasing trend in foreign indirect investment in the U.S. from countries in Europe, Asia and the Pacific Rim, North and South America, the Middle East, and Africa. Additionally, increased compensation of publicly traded firms’ top executives is shown, which has resulted in an increased disparity between the compensation of top management teams and the firms’ hourly employees. Lastly, we expect the suggested bias against women and other minorities, as evidenced here, will be lessened in the future and should result in improved financial performance for firms.

Keywords: Ownership Structures, Mergers and Acquisitions, Shareholder Rights, Financial Performance, Diversity

Authors’ individual contribution: Conceptualization — K.M.H. and G.T.O.; Methodology — K.M.H.; Investigation — K.M.H. and G.T.O.; Formal Analysis — K.M.H. and G.T.O.; Writing — Original Draft — K.M.H. and G.T.O.; Writing — Review & Editing — K.M.H. and G.T.O.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G28, G30, G32, G34, J1, J3

Received: 05.11.2021
Accepted: 28.12.2021
Published online: 30.12.2021

How to cite this paper: Hogan, K. M., & Olson, G. T. (2021). Governance and corporate control in the United States. Corporate Law & Governance Review, 3(2), 41–52. https://doi.org/10.22495/clgrv3i2p4