Professor
Vikramaditya Khanna offers his thoughts on Bebchuk and Hamdani’s article
in Corporate Governance Ratings: One Score, Two Scores, or
More? Khanna begins by offering a succinct summary of the
Bebchuk and Hamdani’s recommendations and capturing the governance
practices that the authors suggest matter most to companies with (CS)
and without (NCS) controlling shareholders. Next, he considers
whether these differences are supported in the extant scholarship.
He considers anecdotal and emprical data from established and emerging
markets and concludes that Bebchuk and Hamdani’s distinctions find
"considerable support" in the literature. Notwithstanding
this support, Khanna turns to consider whether the CS-NCS distinction
is the optimal one to organize the professors’ governance rankings.
Although he notes several other potential considerations, he ultimately
offers a solution that would retain the simplicity and usefulness of
Bebchuk and Hamdani’s CS-NCS distinction while providing insight into
other salient country- or firm-specific distinctions through subsidiary
rankings. Lastly, Khanna offers suggestions for next steps for
implementing the recommendations of The Elusive Quest
for Global Governance Standards.