Marc van Essen

Although shareholder rights are essential for effective privatization processes, along with other formal institutions they are also weak in transition economies offering a new window to understand the new agency problems centered on principal-principal conflicts. In this chapter, we address principal-principal conflicts in transition economies and specifically explore the role of privatization on firm ownership structure and institutional development. We argue that the heterogeneity in terms of the methods and speed of privatization helps us understand the underlying conditions that contributed to the evolution of concentrated ownership over dispersed structure and also the differences in ownership identities and institutional development across transition economies

Responsible investment (RI) and responsible corporate behaviour received a lot of attention during the last decade in the corporate social responsibility (CSR) literature (McWilliams and Siegel 2001, 2006). After the U.S. and European financial markets were being troubled in the early 2000s by several major scandals like Enron, Worldcom, Tyco and Parmalat, financial ethics received a lot of attention by the public as well. Irresponsible corporate behaviour can occur in different ways such as corruption, market abuse, fraud, insider trading, ecological harm, racial or sexual discrimination. Examples include foreign briberies to get supply contracts (Volkswagen), insider trading ahead of a profit warning (EADS), lower salaries for female employees (Wal-Mart), and worker’s conditions in Indonesia (Nike).