Corporate governance is the set of rules and factors that determine the balance of power between firm control holders (large controlling shareholders) and small public investors. In the U.S., scandals such as Enron and WorldCom, where management deceived the public, triggered the Sarbanes-Oxley (SOX) legislation.
In Israel, per the recommendation of the Goshen Committee, elements of SOX were adopted. However, due to the differences betwee prevalencen Israel and the U.S. (most notably, the prevalence in Israel of firms controlled by a family or by a coalition of a few business partners) some adjustments in SOX and some specific domestic regulation are most likely needed. A Chair for research is needed for studying Israeli firms' specific control and business structures, with the objective of promoting higher levels of decency and credibility between the firm and its shareholders, or better corporate governance in short. Similar academic
centers were established in the U.S. and Europe (see www-rohan.sdsu.edu/dept/corpgov, www.bcccc.net and www.ecgi.org).
Another focus of the Chair would be Corporate Social Responsibility. Social responsibility emphasizes the company behavior towards its "stakeholders" which comprise apart of firm shareholders, its employees, customers, suppliers, competitors, local community, and even the environment. The social responsibility literature views companies as "citizens", and demands proper citizenship from the company.
The Chair seeks to position itself as a national, globally-reputed interdisciplinary research center in Corporate Governance, senior management and firms’ social responsibility. The Chair will enrich researchers’, students’, businessmen and legal practitioners’ knowledge mainly by encouraging academic research and facilitating in-depth discussions of the relevant and core issues.
The university is an objective and impartial institute. Only such an institute can be trusted by all involved parties and by the general public as unbiased regarding the troubling and often passionately-debated issues of corporate governance, social responsibility, CEO pay and more.
To achieve these goals: