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CGOV.1:2 - Problem

A group name, business unit or project can conceal several corporations. Financial benefit to the group can be used to justify an act by a subsidiary without considering the subsidiary’s obligations. A board recommendation can be confused with a shareholder decision. Even careful analysis then prepares the wrong act for the wrong participants.

“Corporate governance” also names different questions: allocating powers, exercising an existing power, protecting a holder’s rights, overseeing conduct, or changing the arrangement. Their answers use different rules and produce different effects.