title: MINDING THE CORPORATE GOVERNING GAP: The Institutional Construction of Corporate Governance in Chile
Creators: name: Jimenez, Arturo Gonzalo
Publisher: name: University of Liverpool Repository
Year: 2018

description: Against a backdrop of substantial institutional change in Chile over the last 40 years, this research assesses the challenges faced by the main actors in the corporate governance arena. Chile has embarked on a unique experiment, since it became the first country in the world to elect a Marxist president in 1970, which led to a deep national institutional crisis. The chaotic situation was ended with the military coup d´état in September 1973. The Military Regime soon began applying shock treatment, opening a closed and protected economy and, despite some deep crises along the way, achieved an impressive growth rate, which made Chile a success story. Pinochet’s authoritarian government kept a tight political grip and repressed its opponents. However, after losing a key plebiscite it peacefully handed over power to a democratic government in 1990, so ending 17 years of rule. The following five democratic governments maintained the economic model and over 20 years led the country to sustained economic and social progress. This has positioned Chile as a role model for emerging markets around the world aspiring to reach development and its experience in public and institutional policy are widely studied. However, paradoxically since 2010 Chile has experienced an explosion of corporate scandals and ensuing social rights rebellions, which have been challenging the model, questioning the national institutions. Public trust has fallen to historically-low levels. Unsurprisingly, these events have systematically confronted the corporate elite’s governing practices. Qualified observers, such as MIT professor Ben Ross Schneider, report that these elites have played a key role in the progress of Chile, but, by the same token, are likely also an obstacle to achieving the goal of becoming a fully developed country (Guzmán, 2016). Therefore, a process of Action Research was adopted to gain access to the elite’s inner worlds, questioning their perceptions, beliefs and understandings, and encouraging them to explore options and imagine new ways and solutions to throw light on the key levers that determine the Chilean governance system - with the added benefit – should they accept the conclusions and challenged posed by this research, that these actors are well placed to make change happen in their arenas of professional practice. Consistent with this setting, this research looks to explore the evolution of governing in Chile, as viewed by members of the governance elite. It does so through Institutional Theory lens, using inductive qualitative methods derived from Grounded Theory. The research finds that the concept of corporate governing has adapted to three successive institutional logics during the research period. Through a time-line, I show how each institutional logic has superseded the previous one, but without nullifying them – so adding increasing layers of complexity. This investigation allows us then to identify and delve into these sources of institutional change and associate them with path-dependent transformations at the societal level. Finally, this research helps crystalize the new corporate governing imperatives and extract managerial and theoretical lessons, so contributing to both professional practice and academia. The main contribution can be synthesized as the proposition that corporate governance is not just a matter of business, but a social construct in development, which implies a continual process of minding the corporate governing gaps derived from a country’s changing institutional logics.