E> .0 .// 00 +,- @ . ’ A 3, A B , B . !* .# B # B < =$ # $ 8 9 # # $ # 83, . C; A # A 49 # # # 7 $ # G H$ # # G. H( # $ . # F $ # F #./0, F ,’ "$ 2 F "$ 1 F "$ 1. F 2$ 6 % 7 !$ F / =Bcc G#y J RQ F y !OTcc! ==Bcc G#y c @ F Bcc K R F y !OTcc! 12-1 The debate on corporate governance (CG), in spite of its many insights, has suffered from a lack of realistic and pluralistic, yet precise and design-oriented models. In fact, on one hand, while economic models are design oriented, they have been criticised for being too narrowly focused on financial capital providers’ incentives (Blair 1995, 1996; Osterloh and Frey, 2006). On the other hand, treatments of governance in administrative science, have largely endorsed a ‘stakeholder’ approach, envisaging ‘participation’ in governance of any actor holding significant stakes in corporate activities (Donaldson and Preston, 1995; Cuervo, 2002). Nevertheless, the stakeholder perspective has enlarged enormously the set of actors and preferences that could or should be taken into account, gaining in pluralism but losing in precision and prescriptive capacity (Aoki, 2004). This paper aims to propose an analytic approach to the design of corporate governance mechanisms based on the balance between two main spheres of interests: firm representatives and human resource providers. More precisely, the main research questions addressed in the paper are: Which packages of governance mechanisms maximize the utility of firm representatives – CEO – and human resource providers? On which matters do interests converge and on which do they diverge? Which packages are Pareto-rankable and which are not? Where are there areas of preferences balancing and effective negotiation? From a conceptual standpoint, the framework and study presented in this paper covers an intermediate terrain, addressing internal governance as a negotiated multi-actor problem, for which superior solutions in terms of efficiency and fairness can be specified. More specifically, our approach features a series of characteristics that are missing in previous research on governance and organisation design. First, the approach is both pluralistic and prescriptive. Internal governance design is modelled as a multiple-actor and multiple-preference problem, to which fair and efficient solutions are to be found. Broadly, approaches to the design of governance and organisation mechanisms, assume that one or more packages of mechanisms exist and they can be evaluated as optimal solutions or at least considered as best practices. This judgement implies that these practices themselves, whatever they are – organisation