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(you and me) invest in the stock   Looking at the concept of   ued dependence on oil to pro-  to interfere  n member coun-
          market, we do so without any   Governance, do you think that   duce energy. The two may be   tries/ interns  affairs, the UN is
          intention or incentive to control   this can be applied also to the   linked; however terrorism goes   bound to bc  passive (Rwanda,
          the firms that receive the cash                   far beyond the oil. I believe that   Kosovo, SucI  n, etc.). So, it may
                                   public sector and eventually
          for investment purposes. So,                      the United Nations should play a   be beneficial  or the UN to have
                                   the international organiza-
          who makes sure that your rights                   major role in countering terror-  a state like ti  US that is aggres-
          as an investor are protected?   tions?            ism. However, as you know, the   sive. Sort  01  like a "good cop,
          Well, nobody, except the board                    UN itself is an organization   bad cop" cc  bination. So, the
          of directors (which is typically   Public sector corporate gover-  fraught with governance prob-  willingness  £ the US to play
          too close to the firm to stand up   nance is very important. Non-  lems. With so many diverse   this role is  ctually a positive
          for investor rights), or the legal   profit organizations are probably   interests, and with no interna-  development   (whatever you
          system (which may be under-  the worst when it comes to gov-  tional law to back up UN's right   think of Pre  lent Bush).
          mined by corruption of the judi-  ernance. One of the reasons for
          cial system in many countries).                                            sitions, and portfolio manage-
                                   this is the lack of a clear alloca-  Editor's note:
          So we need to develop systems   tion of ownership rights to the   Professor Espen Eckbo received   ment and performance evalua-
          for protection. When it comes to   resources handled by this sector.   his Ph.D at the University of   tion. He publishes regularly in
          labour, however, everyone is   For this reason it is also more dif-  Rochester (USA) in 1981 and   leading finance journals, and is
          working to negotiate and                                                   a founding co-editor of the
                                   ficult to successfully change   was Professor of Finance at the
          enforce their own labour con-                                              European Finance Review, the
                                   things around. Change processes   University of British Columbia
          tracts. So, you don't need a spe-  become political (with all kinds   (Canada) from 1981 to 1996. He  journal of the European Finance
          cial system of protection for   of special interest groups clam-  held chaired professorships at   Association. He is currently a
          these types of contracts. That's                                           director the Norwegian
                                   ouring for a piece of the pie),   the Norwegian School of
          why corporate governance does                                              Research Council, and a former
                                   while in the corporate sector, at   Management, 1993-94, and at
          not get into the debate over                                               director of the European
                                   least there are some well defined   the Stockholm School of
          globalization of labour markets.   owners (equity holders) with the   Economics, 1996-98, and he has  Finance Association and the
                                   right to design the system.   been a visiting professor at MIT,  American Financial
                                                             UCLA, INSEAD, Vanderbilt   Management Association.
                                                             University and the Norwegian   Dr Eckbo's business experience
          What are the main tasks of   In this world of globalization,   School of Economics and   includes performing contract
          the Centre, and what are you   what do you see as the major   Business Administration. He is   research for United States,
          aiming to achieve?       threats?                  currently a fellow of the Center   Canadian and Norwegian
                                                             for Economic Policy Research   government agencies; serving as
                                                             (CEPR), London.         an expert witness in cases
          The main task is to promote the   On the governance side, there   He received the prestigious   involving corporate governance
          reputation of the Tuck School of   is a definite trend towards inter-  Batterymarch Fellowship in   and insider-trading issues. He
          Business around the world. I do   national convergence of sys-  1987, and has been awarded   chaired the investment commit-
          so by organizing conferences   tems, and I don't think this trend   large competitive research   tee of the University of Oslo's
          and one-day events with busi-  can be broken. The reason is   grants from various national   endowment fund 1997-98, and
          ness and governmental leaders   simply that just about every   research councils. Professor   he has been an advisor to the
          (about one a year). The centre   country (including Russia and   Eckbo conducts research in cor-  trade association of the largest
          has organized policy debates   China) sees it as in their interest   porate finance and capital mar-  mutual funds in Norway. He is
          throughout South America,   to attract foreign investment   kets, with an emphasis on   currently a member of the
          Europe and Asia. I also host a   capital. On the political side, the   investment banking, corporate   board of directors of an index
          world-class academic confer-  main threat to globalization and   governance, mergers and acqui-   fund in Oslo.
          ence in corporate finance here at   international economic develop-
          Tuck every two years.    ment is terrorism and the contin-
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