Corporate governance lessons from Russian enterprise fiascoes

This Article draws on a rich array of deviant behavior in Russian enterpris es to craft lessons for corporate governance theory. First, Professors Fox and Heller define corporate governance by looking to the economic functions of the firm. Based on this definition, they develop a typology that compre hensively shows all the channels through which bad corporate governance can inflict damage on a country's real economy. Second, they explain the cause s of Russian enterprise fiascoes by looking to the particular initial condi tions prevailing at privatization-untenable firm boundaries and insider all ocation of firm shares-and the bargaining dynamics that have followed. This focus offers a new perspective for a comparative corporate governance lite rature derived from United States, Western European, and Japanese models. T he analytic tools created in this Article can inform pressing debates acros s contemporary corporate law, ranging from the theory of the close corporat ion to the viability of "stakeholder" proposals.