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Firm Commitment: Why the corporation is failing us and how to restore trust in it [Kindle Edition]

Colin Mayer
4.4 out of 5 stars  See all reviews (14 customer reviews)

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Product Description


[A] splendid book. (Martin Wolf Financial Times)

A constructive critique of the commercial corporation and ultimately an ambiguous agenda for change. Worthy of wide readership because it is also a carefully weighed historical reflection, and thus unlike the majority of books published in this genre. (Oxford Today Vol. 25 No. 2)

A provocative book ... Mayer's critique of the modern corporation will resonate with millions who sense that something serious has gone amiss. (Bloomberg News)

There is no shortage of reflections on the market failure in the West. [But this is] not just another fashionable tome on the topic. Rather, it is a solemn contemplation of the roots of corporations' defects. You can sense the seriousness of his thoughts in every line. (China Daily)

A smart new book. (The Atlantic)

An important book. It provides an impressive explanation of the state of things and a blueprint for converting the corporation into a 21st century organisation that could perhaps be trusted to promote the interests of economies and societies everywhere. (New Zealand Management)

Mayer makes his case clearly and passionately. (Financial Times Summer Books Guide)

An outspoken book ... This is not a theoretical debate but one of urgent importance for economies around the world. (GRC-Daily (Governance, Risk Management and Compliance))

The combination of theory and its commercial application comes through in this thoughtful study of the corporation. The analysis is quality. (Neil Hedges, Management Today)

Blunt ... thoughtful ... thought-provoking (Eric Krell, Business Finance Magazine)

Lays out a plan for a radical rethink of the purpose of the corporation. (

Lucid analysis (John Lloyd, Financial Times)

Corporate governance is manifestly in crisis: in this lucid and truly important book Colin Mayer explains why. Not only should you read this book, so should governments. (Paul Collier, author of 'The Bottom Billion')

An impassioned and important plea for a reorientation of values in the modern corporation, offered by one of the world's leading scholars of corporate finance, ownership, and control. (Henry Hansmann, Oscar M. Ruebhausen Professor of Law, Yale Law School)

Companies and wealth generation, as Professor Colin Mayer argues in his important book, are about co-creation, sharing risk and long-term trust relationships. (Will Hutton, The Observer)

One lesson of the financial crisis is that the corporation which is a purely financial entity is a financial failure. Colin Mayer makes an important contribution to the rethinking of the nature of modern capitalism. (John Kay, Chairman, Kay Review of Equity Markets and Long Term Decision Making)

Modern theory on incentives, ownership and control of large publicly-traded corporations is broken. In Firm Commitment, Colin Mayer makes a huge and thoughtful contribution to fixing the broken theory. I heartily endorse his prescriptions - values, trustees and time-based shares - which are at the same time practical and break-through. Anyone interested in the future of democratic capitalism should read this book. (Roger Martin, Dean of the Rotman School of Management at University of Toronto)

Original and provocative, Colin Mayer's ideas on reforming the corporation deserve very serious attention. (John Roberts, Stanford Graduate School of Business and author of 'The Modern Firm')

Product Description

The corporation is one of the most important and remarkable institutions in the world. It affects all our lives continuously. It feeds, entertains, houses and, employs us. It generates vast amounts of revenue for those who own it and it invests a substantial proportion of the wealth that we possess. But the corporation is also the cause of immense problems and suffering, a source of poverty and pollution, and its failures are increasing. How is the corporation failing us? Why is it
happening? What should we do to restore trust in it? While governments are subject to repeated questioning and scrutiny, the corporation receives relatively little attention.

Firm Commitment provides a lucid and insightful account of the role of the corporation in modern society and explains why its problems are growing. It gives a fresh perspective on the crises in financial markets, developing countries, and the environment. Based on decades of analysis and research, it describes a new approach to thinking about the firm which not only stops it destroying us but turns it into the means of protecting our environment, addressing social problems, and
creating new sources of entrepreneurship and innovation. It sets out an agenda for converting the corporation into a twenty-first century organization that we will value and trust. It takes you on a journey that starts in the Galapagos, ends in Ancient Egypt, and in the process brings you to a new level of
appreciation of the economic world we inhabit.

Product details

  • Format: Kindle Edition
  • File Size: 468 KB
  • Print Length: 319 pages
  • Page Numbers Source ISBN: 0199669937
  • Publisher: OUP Oxford (14 Feb. 2013)
  • Sold by: Amazon Media EU S.à r.l.
  • Language: English
  • ASIN: B00B1C2YCI
  • Text-to-Speech: Enabled
  • X-Ray:
  • Word Wise: Enabled
  • Average Customer Review: 4.4 out of 5 stars  See all reviews (14 customer reviews)
  • Amazon Bestsellers Rank: #69,087 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

4.4 out of 5 stars
4.4 out of 5 stars
Most Helpful Customer Reviews
5.0 out of 5 stars Transform Shareholders into Real Owners 17 Oct. 2014
Transform Shareholders into Real Owners

This book is about large companies with hundreds of shareholders. The author presents proposals that would lead to corporate action to be in line with their stated values and principles. The author, Professor Colin Mayer, concludes that the Corporate Social Responsibility movement on this point has failed.
The author makes two proposals. The first one is to create a trust that is responsible to see it that stated values and principles are practiced. This trust with trustees would be established next to the Board of Directors, the CEO and his executive committee, and the Annual General Meeting of shareholders (AGM).
The second proposal that strengthens the first one is to differentiate between shareholder voting power not only by the number of shares owned but also depending on the number of years they commit to hold and not sell the shares; the "committed shareholders."
The purpose is to radically reduce the influence from short term large share buyers that are only interested in making short term gains in buying and selling shares. The author expects that with this structure "ownership" becomes meaningful, the way it is in well run privately owned companies. The concept and feeling of "Ownership" in a large company with hundreds of shareholders is not meaningful.
The advantage for the CEO/top management would be that they could no longer be pushed by large short term shareholders to take actions that are in conflict with the values and principles of the corporation; the same applies to the Board of Directors. The committed shareholders can take a meaningful interest in the future of the company and will be interested in the short, medium and long-term performance.
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2 of 3 people found the following review helpful
4.0 out of 5 stars Imperfect but still a very worthwhile read 22 Oct. 2013
Format:Hardcover|Vine Customer Review of Free Product (What's this?)
This book may be imperfect but its still a very worthwhile read. I'm not normally keen on what is essentially a polemic as the quality of analysis and argumentation always end up being compromised. And that's certainly the case here (you may find yourself skim reading some paragraphs). Yet with corporate governance all the rage nowadays (thank the banks and financial services) there is a legitimacy to some of the content - or perhaps its topicality rather than legitimacy given the weaknesses in the content. That said its a decent read.
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1 of 2 people found the following review helpful
3.0 out of 5 stars Heart's in the right place anyway..... 10 July 2013
Format:Hardcover|Verified Purchase
First things first: this book has its heart in the right place. Many of the proposed changes are well conceived and most of the analysis is correct. The sheer stupidity of the efficient market hypothesis and the idiocy of the shareholder value priority are suitably skewered.

However .... there are some adverse points that detract. First some of the arguments are specious and rather silly. As just one instance, the argument that Mayer uses about building institutions (p.33) is flawed -- personal investment of time and reputation by workers is not the same as investment in cash by shareholders (unless the investment in time and reputation is for no cash reward). Second, Mayer still appears to subscribe -- albeit half-heartedly -- to the principal-agent theory which is supposed to describe managers' attitudes towards shareholders' interests. The theory is ludicrously deficient on any but the most simplistic analysis but Mayer can never really bring himself to puncture it completely. Third, the book has been poorly proof read, which detracts from the argument and the reader's flow of thought in following the argument.

But what unsettled me most about the analysis is the choice of some of the examples of 'business leaders' quoted as authorities. For instance, Mayer remarks on p 93 that Roger Carr is 'an exceptionally thoughtful businessman'. (This comes after the heavily airbrushed explanation about the Cadbury takeover by Kraft which Carr gave at the Said Business School in February 2010 from which significant sections are quoted.) Oh come on! And Inspector Clouseau was the world's greatest detective.
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1 of 2 people found the following review helpful
5.0 out of 5 stars How to fix the corporation 8 July 2013
By Jonathan Gifford VINE VOICE
Format:Hardcover|Vine Customer Review of Free Product (What's this?)
Early in this fascinating exploration of corporate ownership and governance, Colin Mayer examines the classic defence - or perhaps the classic celebration - of shareholder value. Shareholders are the ultimate owners of corporations, runs this argument, and they have no protection; they have invested their money, which might be lost. Without shareholders, capitalism loses its foundation. Therefore, shareholders' interests must be protected at all costs by the corporation's hired executives. Thanks to the joys of the free market, this relationship may not be as single-mindedly focussed on supplying a cash return on capital invested as it might sound: it is in shareholders' interest that employees are trained (so that they are more productive) and treated reasonably well (to avoid the cost of replacing disgruntled employees). If the market puts a premium on environmentally-friendly, or well-made and reliable goods, then the executives can (and should) pursue that route because the shareholders will benefit from the premium charged for such goods. All is well in a laissez-fare world driven by the overarching necessity of keeping shareholders happy.

But, argues Mayer, the corporate world isn't actually like that. Shareholders are not the only parties with 'irrecoverable capital' invested in corporations - other stakeholders are equally exposed. If I devote my life to the furtherance of an organisation, and it disappears, I have lost something irrecoverable. If I am a lender or a supplier to the corporation, and it vanishes, I stand to lose a great deal.'The interests of these other parties,' writes Mayer, 'should at least rank alongside those of shareholders and, depending on the degree and extent of their commitment, potentially, ahead of shareholders.
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Most Recent Customer Reviews
5.0 out of 5 stars Five star book
Why the Corporation is Failing Us

CM is a professor at the Said Business School,Oxford. He is concerned that corporations are being run for short term profits and with... Read more
Published 14 months ago by Ms. C. R. Stillman-lowe
4.0 out of 5 stars Firm Commitment
Author,Colin Mayer is Peter Moores Professor of Management Studies and former Dean of the Business School at the University of Oxford. Read more
Published 14 months ago by Jago Wells
4.0 out of 5 stars a significant contribution to a burning debate
The role of the modern corporation and its power to promote innovation and bring disaster in equal measure is a burning debate in contemporary capitalism. Read more
Published 14 months ago by Ioannis Glinavos
4.0 out of 5 stars Convincing
This book presents quite a powerful and persuasive polemic.
It is quite easy to follow. The analysis is very powerful, the arguments are well marshalled and many of his... Read more
Published 16 months ago by The Emperor
4.0 out of 5 stars Shareholder vs stakeholder value
The main topoc is commitment and trust to survive in longterm competition. In that meaning we should speak of stakeholder value instead of very popular shareholder value. Read more
Published 16 months ago by Markku Ihantola
4.0 out of 5 stars Well written and a good read
In this book Dr. Mayer takes us through three sections, of how the corporation is failing us, why it is happening, and what should we do about it. Read more
Published 16 months ago by Mr. T. Ralph
5.0 out of 5 stars Intelligent, thought-provoking, 'almost' radical
As business books go this was surprisingly superior to most. Whilst not facing full on to the fact that modern capitalism is close to being finished as a viable economic system the... Read more
Published 17 months ago by Zipster Zeus
4.0 out of 5 stars Do we exist to serve the company, or...?
An exploration - with some biased evidence - of how a company works, and interacts with its customers without which it would not exist. Read more
Published 18 months ago by Mr. M. A. Reed
5.0 out of 5 stars Quietly radical
Excellent analysis of the downsides of the existing payoff structure of the plc and how to alter it. (Gibb's summary is sound. Read more
Published 22 months ago by David Dewhurst
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