The history of the term "corporate governance".

A tweet today led me to this interesting paper by Ronald Gilson "From Corporate Law to Corporate Governance".  The work of US legal scholars writing in this area is always worth reading, although I sometimes find their US-centric focus frustrating. And at first glance, there are points that I might quibble about in Gilson's discussion, although I agree with his conclusion about the importance of recognising change and the need for adaptability in governance arrangements.

But I have yet to read the paper properly as I was brought up short by footnote 8, which begins:

 "Brian R, Cheffins, The History of Corporate Governance in The Oxford Handbook of Corporate Governance (2013), nicely tracks the emergence of the term corporate governance. He notes that the term only came into vogue in the 1970s in a single country – the United States."

In writing the Cadbury book, I thought it would be helpful to explore the origins of the expression "corporate governance" so I did considerable research on this. The first example I could find occurred in a 1953 paper by David F Cavers, a US legal scholar, entitled "The Economic Consequences of Atomic Attack". Cavers was concerned about the need to sustain the US economic system in the event of attack. He sets out in considerable detail where problems would arise and, in the context of dealing with the property of those who might die in such an attack, he stated that "Flexibility in corporate governance would also be needed." (p33) He didn't define the term and this is the only instance of its use in the paper. That suggested to me that the term was already in use, certainly among legal scholars in that era.

The earliest detailed discussion of corporate governance that I found was in the work of a US management scholar, Richard Eells, in his book "The Government of Corporations" published in 1962. In the preface to his book, he wrote:

"During the last ten years, in various studies of the modern corporation and its role in our free society, I have repeatedly had to touch on the subject of the present volume peripherally. But only within the last few years has it been possible to discuss the subject of corporate governance systematically, as I have tried to do here."

Eells, who had a business background, wrote about companies from a pragmatic perspective which may be why his work was largely neglected by later scholars more interested in theory.

I suppose "came into vogue" implies the start of the wider discussion of the term but I do think it's important to know its earlier history. (Encountering Professor Cheffins at a conference, I did challenge him on this but he was airily dismissive.)