Cultural governance is governance of culture. It includes cultural policy made by governments but extends to cultural influence exerted by non-state actors and to policies which influence culture indirectly; the tendency to discuss cultural governance rather than policy corresponds to the broader shift from government to governance, with the emphasis shifting from state policymakers to include the influence of civil society organizations and the private sector. A broad interpretation of "governance" could include government policies outside the scope of cultural policy which impact culture; the precise meaning of "cultural governance" depends on the definition of culture, which can range from narrow reference to institutions like museums and concert halls connected with the arts to broad meanings such as a society’s way of life or its systems of knowledge and symbols. In the broader view, cultural governance deals holistically with the production of meaning in a society, through aspects including the culture industry, the formation of taste, the use of language.
The dominant actor in global cultural governance is UNESCO, a United Nations specialized agency created in 1946 and headquartered in Paris, France. UNESCO produces documents which local governments use as guidelines and may incorporate into law, it has promoted the development of networks such as the Global Alliance for Cultural Diversity to promote public/social/private partnership in the cultural area. In recent years the organization has emphasized the importance of cities as cultural actors with networks such as the International Coalition of Cities Against Racism and the Creative Cities Network. UNESCO itself relies upon partnerships with the private sector in selecting and promoting World Heritage Sites. Meetings for the selection of these sites attract several hundred attendees, including representatives of interested groups. "World heritage" issues gain prominence through promotion in the mass media with publications such as National Geographic and many others. All steps of the process promote the development of a metaculture capable of adjudicating global cultural issues and producing a global literary canon from a vantage point of universality.
Agenda 21 for culture, administered by an international organization called United Cities and Local Governments, represents a vector for global governance conducted by its members at a local level. This concept endorses "culture as a fourth pillar of sustainable development", adding to the three pillars of sustainable development identified in Agenda 21: economy and environment. Cultural governance in the European Union includes a range of cultural policies geared toward promoting European culture; the European Commission's 2007 communication "on a European agenda for culture in a globalizing world" describes interaction with culture through a various channels, including support for and consultation with cultural organizations, encouragement of artist mobility and intercultural communication, use of European culture in international relations, maintenance of EU copyright law, promotion of European cultural goods and services. The European governments consider it necessary to promote and guide cultural development because of deficiencies in cultural outcomes of the free market.
Further, intercultural communication and integration are considered intertwined with economic integration. In the People's Republic of China a major goal of cultural governance is to reinforce the legitimacy of the government. Culture has long played a role in the governance of China, from the harmonious society promoted by Confucianism to the Cultural Revolution and other Chinese Communist Party strategies for transforming traditional society into industrialized communism. Present-day Chinese leaders have made significant references in speeches to a continual tradition of Chinese culture and its importance for nationalist and geopolitical purposes. Cultural governance is integrated with propaganda, censorship and education. Within the Chinese Ministry of Culture, the State Administration of Cultural Heritage has stated that China's cultural heritage should be used to "strengthen national unity and promote sustainable development of the natural culture". Localities in China have assumed much of the responsibility for identifying heritage sites, with the result that 300,000 such sites have been declared, many without state protection and support.
Local governments have turned to private companies to manage these sites and operate tourism businesses. Sites may come under many overlapping authorities, as in the case of Mount Wutai, a national park and World Heritage Site, managed by eight government agencies and governed by 29 international and local laws. Macdonald, Susan & Caroline Cheong; the Role of Public-Private Partnerships and the Third Sector in Conseving Heritage Buildings and Historic Urban Areas. Los Angeles: Getty Conservation Institute. ISBN 978-1-937433-19-2. Psychogiopoulou, Evangelia. Cultural Governance and the European Union: Protecting and Promoting Cultural Diversity in Europe. Palgrave- Macmillan. ISBN 978-1-137-45375-4. Schmitt, Thomas. Cultural Governance as a conceptual framework. Max Planck Institute for the Study of Religious and Ethnic Diversity. MMG Working Paper 11-02. ISSN 2192-2357. Shepherd, Robert J. & Larry Yu. Heritage Management and Governance in China: Managing the Past to Serve the Present. Springer Science+Business Media.
Governance in higher education
Governance in higher education is the means by which institutions for higher education are formally organized and managed. University governance is the way in which universities are operated. Governing structures for higher education are differentiated throughout the world, but the different models nonetheless share a common heritage. Internationally, tertiary education includes private not-for-profit, private for-profit, public institutions governed by differentiated structures of management. Governance and management of post-secondary institutions becomes more diverse with the differences in defining the relationships between higher and tertiary education, postsecondary education and vocational education, community college models of education; the issues are complicated by current debates over collegial and shared forms of governance contrasted to corporate and business forms of institutional governance. The concept of governance in postsecondary education predominantly refers to the internal structure and management of autonomous institutions.
The internal governance organization consists of a governing board, the university president with a team of administrative chancellors and staff, faculty senates, academic deans, department chairs, some form of organization for student representation. In the United States, state institution governing boards emphasize the concept of citizen governance in recognizing that board members serve a civic role for the institution. Management structures themselves have become complex due to the increasing complexity of intraorganizational, interorganizational and governmental relationships. Whether college and university education, adult education, technical or vocational education, educational administration presents complex challenges at all levels of private and public education. "Governance" is defined by Eckel as the macro-level of policy decision making. Kezar and Eckel suggest governance is a multi-level concept including several different bodies and processes with different decision-making functions.
In this way, governance is sometimes defined at difference to the internal management of institutions. Throughout the world, many national and local governments have begun to establish coordinating and governing boards as both buffer and bridge to coordinate governance and institutional management. Due to the influences of public sector reforms, several authors point out that next to the concept of shared and participative governance a new form of governance has emerged. According to Lapworth, the rise of the notion of corporate governance and the decline of the shared or consensual governance can be seen to be a result of the decline in academic participation, a growing tendency towards managerialism and the new environment where the universities are operating. University governance varies between countries. McMaster notes the different cultures in universities and the traditional relationships between faculty and administration, characterizing historical transitions and suggesting that universities today are undergoing transitions in culture.
Kezar and Eckel point out the substance of governance has changed during the last decades with more emphasis put on high stake issues and more incremental decisions made in a less collegial mode – the reasons for this stem from trends that have devalued the notion of participation and from the external pressures for more accountability and demands for quicker decision-making. McMaster discusses the same changes in university management resulting from the “huge amount of additional administrative work at all levels within the university, the requirement for a wide range of specialist skills in areas such as marketing, HR management, management accounting, web development and instructional design” and the difficulties with the tensions that have resulted between collegial and corporate models of management. Dearlove emphasises that, under the conditions of mass higher education, no university can avoid the need for some sort of bureaucratic management and organisation, though this does not mean that the importance of informal discipline and profession-based authority can be ignored.
Lapworth advocates what the author believes is a model of university governance with the positive aspects of corporate and collegial approaches. The issues in university governance discussed by these literatures are detailed by Coaldrake and Little through a comparative study of current trends in Australia, the United Kingdom, the United States, with poignant insight into the different models of governance for the management of higher education. Critical of the currents of change toward “corporate governance,” the authors cite reference to literature that calls for “re-balancing” of university governance, maintaining that the re-balancing “would amount to a clarification of shared governance”. With changing roles in human resources and the external pressures for accountability affecting university relationships internally, McMaster provides insights by defining management styles in terms of nested partnership between faculty and administration, contiguous partnership, segmented partnership.
With debates over the recent trends, university organizations, governing associations, numerous postsecondary institutions themselves have set forth policy statements on governance. Within the US, governance varies from univer
Federalism is the mixed or compound mode of government, combining a general government with regional governments in a single political system. Its distinctive feature, exemplified in the founding example of modern federalism by the United States under the Constitution of 1787, is a relationship of parity between the two levels of government established, it can thus be defined as a form of government in which there is a division of powers between two levels of government of equal status. Federalism differs from confederalism, in which the general level of government is subordinate to the regional level, from devolution within a unitary state, in which the regional level of government is subordinate to the general level, it represents the central form in the pathway of regional integration or separation, bounded on the less integrated side by confederalism and on the more integrated side by devolution within a unitary state. Leading examples of the federation or federal state include India, the United States, Mexico, Germany, Switzerland and Australia.
Some today characterize the European Union as the pioneering example of federalism in a multi-state setting, in a concept termed the federal union of states. The terms'federalism' and'confederalism' both have a root in the Latin word foedus, meaning "treaty, pact or covenant." Their common meaning until the late eighteenth century was a simple league or inter-governmental relationship among sovereign states based upon a treaty. They were therefore synonyms, it was in this sense that James Madison in Federalist 39 had referred to the new US Constitution as'neither a national nor a federal Constitution, but a composition of both'. In the course of the nineteenth century the meaning of federalism would come to shift, strengthening to refer uniquely to the novel compound political form established, while the meaning of confederalism would remain at a league of states. Thus, this article relates to the modern usage of the word'federalism'. Modern federalism is a system based upon democratic rules and institutions in which the power to govern is shared between national and provincial/state governments.
The term federalist describes several political beliefs around the world depending on context. Federalism is sometimes viewed as in the context of international negotiation as "the best system for integrating diverse nations, ethnic groups, or combatant parties, all of whom may have cause to fear control by an overly powerful center." However, in some countries, those skeptical of federal prescriptions believe that increased regional autonomy is to lead to secession or dissolution of the nation. In Syria, federalization proposals have failed in part because "Syrians fear that these borders could turn out to be the same as the ones that the fighting parties have carved out."Federations such as Yugoslavia or Czechoslovakia collapsed as soon as it was possible to put the model to the test. According to Daniel Ziblatt's Structuring the State, there are four competing theoretical explanations in the academic literature for the adoption of federal systems: Ideational theories, which hold that a greater degree of ideological commitment to decentralist ideas in society makes federalism more to be adopted.
Cultural-historical theories, which hold that federal institutions are more to be adopted in societies with culturally or ethnically fragmented populations. "Social contract" theories, which hold that federalism emerges as a bargain between a center and a periphery where the center is not powerful enough to dominate the periphery and the periphery is not powerful enough to secede from the center. "Infrastructural power" theories, which hold that federalism is to emerge when the subunits of a potential federation have developed infrastructures. Immanuel Kant was an advocate of federalism, noting that "the problem of setting up a state can be solved by a nation of devils" so long as they possess an appropriate constitution which pits opposing factions against each other with a system of checks and balances. In particular individual states required a federation as a safeguard against the possibility of war. On the 1st of January 1901 the nation-state of Australia came into existence as a federation.
The Australian continent was colonised by the United Kingdom in 1788, which subsequently established six self-governing, colonies there. In the 1890s the governments of these colonies all held referendums on becoming the unified, self-governing "Commonwealth of Australia" within the British Empire; when all the colonies voted in favour of federation, the Federation of Australia commenced, resulting in the establishment of the Commonwealth of Australia in 1901. The model of Australian federalism adheres to the original model of the United States of America, although it does so through a parliamentary Westminster system rather than a presidential system. In Brazil, the fall of the monarchy in 1889 by a military coup d'état led to the rise of the presidential system, headed by Deodoro da Fonseca. Aided by well-known jurist Ruy Barbosa, Fonseca established federalism in Brazil by decree, but this system of government would be confirmed by every Brazilian constitution since 1891, although some of them would distort some of the federalist principles.
The 1937 federal government had the authority to appoint State Governors at will, thus centralizing power in the hands of P
Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate managers and corporate shareholders to a larger group of public stakeholders that includes workers, suppliers and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit and deny the polity a democratic voice in economic policy decisions. In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's inherent effective demand gap. Proponents of economic democracy argue that modern capitalism periodically results in economic crises characterized by deficiency of effective demand as society is unable to earn enough income to purchase its output production. Corporate monopoly of common resources creates artificial scarcity, resulting in socio-economic imbalances that restrict workers from access to economic opportunity and diminish consumer purchasing power.
Economic democracy has been proposed as a component of larger socioeconomic ideologies, as a stand-alone theory and as a variety of reform agendas. For example, as a means to securing full economic rights, it opens a path to full political rights, defined as including the former. Both market and non-market theories of economic democracy have been proposed; as a reform agenda, supporting theories and real-world examples range from decentralization and economic liberalization to democratic cooperatives, public banking, fair trade and the regionalization of food production and currency. According to many analysts, deficiency of effective demand is the most fundamental economic problem; that is, modern society does not earn enough income to purchase its output. For example, geographer David Harvey claims, "Workers spending their wages is one source of effective demand, but the total wage bill is always less than the total capital in circulation, so the purchase of wage goods that sustain daily life is never sufficient for the profitable sale of the total output".
While balanced mixed economies have existed throughout history, veteran Project Manager for the U. S. Treasury Department, Richard C. Cook and other critics claim that command economies are predominate, citing state capitalism and imperialism as related; as common resources are monopolized by imperial centers of wealth and power, conditions of scarcity are imposed artificially upon the majority, resulting in large-scale socio-economic imbalance. In the Georgist view of any economic system, "wealth" includes all material things produced by labor for the satisfaction of human desires and having exchange value. Land and capital are considered the essential factors in producing wealth. Land includes all natural forces. Labor includes all human exertion. Capital includes the portion of wealth devoted to producing more wealth. While the income of any individual might include proceeds from any combination of these three sources—land and capital are considered mutually exclusive factors in economic models of the production and distribution of wealth.
According to Henry George: "People seek to satisfy their desires with the least exertion". Human beings interact with nature to produce goods and services that other human beings need or desire; the laws and customs that govern the relationships among these entities constitute the economic structure of a given society. Alternately, David Schweickart asserts in his book, After Capitalism: "The structure of a capitalist society consists of three basic components: "The bulk of the means of production are owned, either directly by individuals or by corporations that are themselves owned by private individuals. "Products are exchanged in a market --, to say and services are bought and sold at prices determined for the most part by competition and not by some governmental pricing authority. Individual enterprises compete with one another in providing goods and services to consumers, each enterprise trying to make a profit; this competition is the primary determinant of prices. "Most of the people who work for pay in this society work for other people, who own the means of production.
Most working people are'wage labourers'". Supply and demand are accepted as market functions for establishing prices. Organisations endeavor to 1) minimize the cost of production. But, according to David Schweickart, if "those who produce the goods and services of society are paid less than their productive contribution" as consumers they cannot buy all the goods produced, investor confidence tends to decline, triggering declines in production and employment; such economic instability stems from a central contradiction: Wages are both a cost of production and an essential source of effective demand, resulting in deficiency of effective demand along with a growing interest in economic democracy. In chapter 3 of his book, "Community Organizing: Theory and Practice", Douglas P. Biklen discusses a variety of perspectives on "The Making of Social Problems". One of those views suggests that "writers and organizers who define social problems in terms of social and economic democracy see problems not as the experiences of poor people, but as the relationship of poverty to wealth and exploitation".
Biklen states that according to this viewpoint: orporate power, upper class power, uneven distribution of wealth and prejudice cause social problems... he problem is not one of poverty, but of enormous wealth. The problem is not one o
In economics, a free market is a system in which the prices for goods and services are determined by the open market and by consumers. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority, from all forms of economic privilege and artificial scarcities.. Proponents of the concept of free market contrast it with a regulated market in which a government intervenes in supply and demand through various methods, such as tariffs, used to restrict trade and to protect the local economy. In an idealized free-market economy, prices for goods and services are set by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy. Scholars contrast the concept of a free market with the concept of a coordinated market in fields of study such as political economy, new institutional economics, economic sociology and political science. All of these fields emphasize the importance in existing market systems of rule-making institutions external to the simple forces of supply and demand which create space for those forces to operate to control productive output and distribution.
Although free markets are associated with capitalism within a market economy in contemporary usage and popular culture, free markets have been advocated by anarchists and some proponents of cooperatives and advocates of profit sharing. Criticism of the theoretical concept may regard systems with significant market power, inequality of bargaining power, or information asymmetry as less than free, with regulation being necessary to control those imbalances in order to allow markets to function more efficiently as well as produce more desirable social outcomes; the laissez-faire principle expresses a preference for an absence of non-market pressures on prices and wages, such as those from discriminatory government taxes, tariffs, regulations of purely private behavior, or government-granted or coercive monopolies. In The Pure Theory of Capital, Friedrich Hayek argued that the goal is the preservation of the unique information contained in the price itself; the definition of free market has been disputed and made complex by collectivist political philosophers and socialist economic ideas.
This contention arose from the divergence from classical economists such as Richard Cantillon, Adam Smith, David Ricardo and Thomas Robert Malthus and from the continental economic science developed by the Spanish scholastic and French classical economists, including Anne-Robert-Jacques Turgot, Baron de Laune, Jean-Baptiste Say and Frédéric Bastiat. During the marginal revolution, subjective value theory was rediscovered. Although laissez-faire has been associated with capitalism, there is a similair left-wing laissez-faire system called free-market anarchism known as free-market anti-capitalism and free-market socialism to distinguish it from laissez-faire capitalism. Thus, critics of laissez-faire as understood argues that a laissez-faire system would be anti-capitalist and socialist. Various forms of socialism based on free markets have existed since the 19th century. Early notable socialist proponents of free markets include Pierre-Joseph Proudhon, Benjamin Tucker and the Ricardian socialists.
These economists believed that genuinely free markets and voluntary exchange could not exist within the exploitative conditions of capitalism. These proposals ranged from various forms of worker cooperatives operating in a free market economy, such as the mutualist system proposed by Proudhon, to state-owned enterprises operating in unregulated and open markets; these models of socialism are not to be confused with other forms of market socialism where publicly owned enterprises are coordinated by various degrees of economic planning, or where capital good prices are determined through marginal cost pricing. Advocates of free-market socialism such as Jaroslav Vanek argue that genuinely free markets are not possible under conditions of private ownership of productive property. Instead, he contends that the class differences and inequalities in income and power that result from private ownership enable the interests of the dominant class to skew the market to their favor, either in the form of monopoly and market power, or by utilizing their wealth and resources to legislate government policies that benefit their specific business interests.
Additionally, Vanek states that workers in a socialist economy based on cooperative and self-managed enterprises have stronger incentives to maximize productivity because they would receive a share of the profits in addition to receiving their fixed wage or salary. Socialists assert that free-market capitalism leads to an excessively skewed distribution of income which in turn leads to social instability; as a result, corrective measures in the form of social welfare, re-distributive taxation and administrative costs are required, but they end up being paid into workers hands who spend and help the economy to run. They claim. Thus, free-market socialism desires government regulation of markets to prevent social instability, although at the cost of taxpayer dollars; as explained above, for classical economists such as Adam Smith the term free market does not refer to a market free from government interference, but rather free from all forms of economic privilege and artificial scarcities. This implies that economic rents, i.e. profits generated from a lack of perfect competition, must be reduced or eliminated as much as possible through free competition.
Economic theory suggests the returns to l
A political party is an organized group of people with common views, who come together to contest elections and hold power in the government. The party agrees on some proposed policies and programmes, with a view to promoting the collective good or furthering their supporters' interests. While there is some international commonality in the way political parties are recognized and in how they operate, there are many differences, some are significant. Many political parties have an ideological core, but some do not, many represent ideologies different from their ideology at the time the party was founded. Many countries, such as Germany and India, have several significant political parties, some nations have one-party systems, such as China and Cuba; the United States is in practice a two-party system but with many smaller parties participating and a high degree of autonomy for individual candidates. Political factions have existed in democratic societies since ancient times. Plato writes in his Republic on the formation of political cliques in Classical Athens, the tendency of Athenian citizens to vote according to factional loyalty rather than for the public good.
In the Roman Republic, Polybius coined the term ochlocracy to describe the tendency of politicians to mobilise popular factionalist sentiment against their political rivals. Factional politics remained a part of Roman political life through the Imperial period and beyond, the poet Juvenal coined the phrase "bread and circuses" to describe the political class pandering to the citizenry through diversionary entertainments rather than through arguments about policy. "Bread and circuses" survived as part of Byzantine political life - for example, the Nika revolt during the reign of Justinian was a riot between the "Blues" and the "Greens"—two chariot racing factions at the Hippodrome, who received patronage from different Senatorial factions and religious sects. The patricians who sponsored the Blues and the Greens competed with each other to hold grander games and public entertainments during electoral campaigns, in order to appeal to the citizenry of Constantinople; the first modern political factions, can be said to have originated in early modern Britain.
The first political factions, cohering around a basic, if fluid, set of principles, emerged from the Exclusion Crisis and Glorious Revolution in late 17th century England. The Whigs supported Protestant constitutional monarchy against absolute rule, they were interested in the citizens of United Kingdom being free from the aristocracy and opposed to any tyranny, however they supported the constitutional aristocracy and does not consider the British nobility abusive because of its limits; the leader of the Whigs was Robert Walpole, who maintained control of the government in the period 1721–1742. As the century wore on, the factions began to adopt more coherent political tendencies as the interests of their power bases began to diverge; the Whig party's initial base of support from the great aristocratic families widened to include the emerging industrial interests and wealthy merchants. As well as championing constitutional monarchy with strict limits on the monarch's power, the Whigs adamantly opposed a Catholic king as a threat to liberty, believed in extending toleration to nonconformist Protestants, or dissenters.
A major influence on the Whigs were the liberal political ideas of John Locke, the concepts of universal rights employed by Locke and Algernon Sidney. Although the Tories were out of office for half a century, for most of this period the Tories retained party cohesion, with occasional hopes of regaining office at the accession of George II and the downfall of the ministry of Sir Robert Walpole in 1742, they acted as a united, though unavailing, opposition to Whig corruption and scandals. At times they cooperated with the "Opposition Whigs", Whigs who were in opposition to the Whig government, they regained power with the accession of George III in 1760 under Lord Bute. When they lost power, the old Whig leadership dissolved into a decade of factional chaos with distinct "Grenvillite", "Bedfordite", "Rockinghamite", "Chathamite" factions successively in power, all referring to themselves as "Whigs". Out of this chaos, the first distinctive parties emerged; the first such party was the Rockingham Whigs under the leadership of Charles Watson-Wentworth and the intellectual guidance of the political philosopher Edmund Burke.
Burke laid out a philosophy that described the basic framework of the political party as "a body of men united for promoting by their joint endeavours the national interest, upon some particular principle in which they are all agreed". As opposed to the instability of the earlier factions, which were tied to a particular leader and could disintegrate if removed from power, the party was centred around a set of core principles and remained out of power as a united opposition to government. A coalition including the Rockingham Whigs, led by the Earl of She
Corporate governance is the collection of mechanisms and relations by which corporations are controlled and operated. Governance structures and principles identify the distribution of rights and responsibilities among different participants in the corporation and include the rules and procedures for making decisions in corporate affairs. Corporate governance is necessary because of the possibility of conflicts of interests between stakeholders between shareholders and upper management or among shareholders. Corporate governance includes the processes through which corporations' objectives are set and pursued in the context of the social and market environment; these include monitoring the actions, policies and decisions of corporations, their agents, affected stakeholders. Corporate governance practices can be seen as attempts to align the interests of stakeholders. Interest in the corporate governance practices of modern corporations in relation to accountability, increased following the high-profile collapses of a number of large corporations in 2001–2002, many of which involved accounting fraud.
Corporate scandals of various forms have maintained public and political interest in the regulation of corporate governance. In the U. S. these include scandals surrounding Enron and MCI Inc.. Their demise led to the enactment of the Sarbanes-Oxley Act in 2002, a U. S. federal law intended to improve corporate governance in the United States. Comparable failures in Australia are associated with the eventual passage of the CLERP 9 reforms there, that aimed to improve corporate governance. Similar corporate failures in other countries stimulated increased regulatory interest; the need for corporate governance follows the need to mitigate conflicts of interests between stakeholders in corporations. These conflicts of interests appear as a consequence of diverging wants between both shareholders and upper management and among shareholders, although other stakeholder relations are affected and coordinated through corporate governance. In large firms where there is a separation of ownership and management, the principal–agent issue can arise between upper-management and the shareholder.
The shareholders and upper management may have different interests, where the shareholders desire profit, upper management may be driven at least in part by other motives, such as good pay, good working conditions, or good relationships on the workfloor, to the extent that these are not necessary for profits. Corporate governance is necessary to align and coordinate the interests of the upper management with those of the shareholders. One more specific danger that demonstrates possible conflict between shareholders and upper management materializes through stock purchases. Executives may have incentive to divert firm profit towards buying shares of own company stock, which will cause the share price to rise. However, retained earnings will not be used to purchase the latest equipment or to hire quality people; as a result, executives can sacrifice long-term profits for short-term personal benefits, which shareholders may find difficult to spot as they see their own shares rising rapidly. The principal-agent problem can be intensified when upper management acts on behalf of multiple shareholders -, the case in large firms.
When upper management acts on behalf of multiple shareholders, the multiple shareholders face a collective action problem in corporate governance, as individual shareholders may lobby upper management or otherwise have incentives to act in their individual interests rather than in the collective interest of all shareholders. As a result, there may be free-riding in steering and monitoring of upper management, or conversely, high costs may arise from duplicate steering and monitoring of upper management. Conflict may break out between principals, this all leads to increased autonomy for upper management. Ways of mitigating or preventing these conflicts of interests include the processes, policies and institutions which affect the way a company is controlled - and this is the challenge of corporate governance. To solve the problem of governing upper management under multiple shareholders, corporate governance scholars have figured out that straightforward solution of appointing one or more shareholders for governance is to lead to problems because of the information asymmetry it creates.
Shareholders' meetings are necessary to arrange governance under multiple shareholders, it has been proposed that this is the solution to the problem of multiple principals due to median voter theorem: shareholders' meetings lead power to be devolved to an actor that holds the median interest of all shareholders, thus causing governance to best represent the aggregated interest of all shareholders. An important theme of governance is the extent of corporate accountability. A related discussion at the macro level focuses on the effect of a corporate governance system on economic efficiency, with a strong emphasis on shareholders' welfare; this has resulted in a literature focused on economic analysis. Corporate governance has been more narrowly defined as "a system of law and sound approaches by which corporations are directed and controlled focusing on the internal and external corporate structures with the intention of monitoring the actions of management and directors and