Corporate Governance and Income Inequality: The Role of the Monitoring Board
Ezra Wasserman Mitchel*
It is hardly news that income inequality has become a serious problem in many countries, and the United States appears quite prominently on the list. Much has been written about the problem and there surely are multiple causes, but I argue in this paper that the dominance of the monitoring model of corporate boards of directors plays a significant role because of its responsibility for the creation of the shareholder value model of corporate purpose.
I trace the history of the evolution of American capitalism and the development of the monitoring board, and map it on the history of American income inequality. While I cannot prove direct causation, the circumstantial evidence seems overwhelming.
I conclude with some brief suggestions for containing the problem.
*Professor of Law, Shanghai University of Political Science and Law.