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16 Theoretical Inq. L. 1 (2015)

handle is hein.journals/thinla16 and id is 1 raw text is: The Corporate Governance Movement, Banks, and the Financial Crisis Brian R. Cheffins * This Article discusses why a corporate governance movement that commenced in the United States in the 1970s became an entrenched feature ofAmerican capitalism and describes how the chronology differed in a potentially crucial way for banks. The Article explains corporate governance s emergence and staying power by reference to changing market conditions and a deregulation trend that provided executives with unprecedented managerial discretion as the twentieth century drew to a close. With banking the historicalpattern paralleled general trends in large measure. Still, while the imperial CEO who achieved prominence in the 1980s became outmoded for the most part after corporate scandals at the start of the 2000s, this was not the case with large financial companies. The continued boldness of star CEOs in the financial services industry plausibly contributed to the market turmoil of 2008, but the financial crisis emphatically ended the corporate governance 'free pass banks had enjoyed. INTRODUCTION It has been well known since at least the 1932 publication of Adolf Berle and Gardiner Means's The Modern Corporation and Private Property that shareholder passivity creates latitude for top executives of U.S. public companies Faculty of Law, University of Cambridge. The author is grateful for feedback from Carsten Gemer-Beuerle, Edmund Schuster and the participants at the January 2014 conference on Financial Regulation and Comparative Corporate Governance at Tel Aviv University Faculty of Law.

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