TY - JOUR
T1 - The end of "corporate" governance
T2 - (Hello "platform" governance)
AU - Mc Cahery, Joseph
AU - Vermeulen, Erik
AU - Fenwick, Mark
PY - 2019/3
Y1 - 2019/3
N2 - In a technology-driven, digital world, many of the largest and most successful businesses now operate as ‘platforms’. Such firms leverage networked technologies to facilitate economic exchange, transfer information, connect people, and make predictions. Platform companies are already disrupting multiple industries, including retail, hotels, taxis, and others, and are aggressively moving into new sectors, such as financial services. This paper examines the distinctive features of this new business model and its implications for regulation, notably corporate governance. In particular, the paper suggests that a tension exists between the incentives created by modern corporate governance and the business needs of today’s platforms. The current regulatory framework promotes an unhealthy ‘corporate’ attitude that is failing platforms, and a new direction (what we term ‘platform governance’) is urgently required. In identifying this new regulatory direction, the paper considers how firms might develop as successful platforms. Although there is no ‘one-size-fits-all’ solution, the paper describes three interconnected strategies: (1) leveraging current and near-future digital technologies to create more ‘community-driven’ forms of organization; (2) building an ‘open and accessible platform culture’; and (3) facilitating the creation, curation, and consumption of meaningful ‘content’. The paper concludes that jurisdictions that are the most successful in designing a new ‘platform governance’ based on the promotion of these strategies will be the primary beneficiaries of the digital transformation.
AB - In a technology-driven, digital world, many of the largest and most successful businesses now operate as ‘platforms’. Such firms leverage networked technologies to facilitate economic exchange, transfer information, connect people, and make predictions. Platform companies are already disrupting multiple industries, including retail, hotels, taxis, and others, and are aggressively moving into new sectors, such as financial services. This paper examines the distinctive features of this new business model and its implications for regulation, notably corporate governance. In particular, the paper suggests that a tension exists between the incentives created by modern corporate governance and the business needs of today’s platforms. The current regulatory framework promotes an unhealthy ‘corporate’ attitude that is failing platforms, and a new direction (what we term ‘platform governance’) is urgently required. In identifying this new regulatory direction, the paper considers how firms might develop as successful platforms. Although there is no ‘one-size-fits-all’ solution, the paper describes three interconnected strategies: (1) leveraging current and near-future digital technologies to create more ‘community-driven’ forms of organization; (2) building an ‘open and accessible platform culture’; and (3) facilitating the creation, curation, and consumption of meaningful ‘content’. The paper concludes that jurisdictions that are the most successful in designing a new ‘platform governance’ based on the promotion of these strategies will be the primary beneficiaries of the digital transformation.
KW - Blockchain
KW - Corporate governance
KW - Decentralization
KW - Digital transformation
KW - Disclosure
KW - Finance
KW - Organizations
KW - Platforms
KW - Technology
KW - Transparency
UR - https://research.tilburguniversity.edu/en/publications/d480441e-7395-4611-a9bc-f2029a85b554
U2 - 10.1007/s40804-019-00137-z
DO - 10.1007/s40804-019-00137-z
M3 - Article
SN - 1566-7529
VL - 20
SP - 171
EP - 199
JO - European Business Organization Law Review
JF - European Business Organization Law Review
IS - 1
ER -