Introduction to the Corporate Governance of Religion

Abstract

Stationed at the border between the past and the present, the corporate governance of religion is concerned with the governance mechanisms by which religious organizations are controlled and directed. Building on similarities between contemporary organizations and their predecessors in Roman Catholic monasticism, this essay illustrates that studying the past can be of enormous benefit. It allows us to see familiar problems in a new light: for example, bureaucratic rules – nowadays no longer linked to efficiency – that emerged in Catholic orders and enabled organizational learning, innovations, and survival in uncertain environments. The study of the past is also an appreciation for the kind of governance mechanisms that have staying power: Catholic orders can be viewed as pioneers of corporate governance and show what kind of governance is suitable to reduce agency problems. Finally, when abstract organizational theories are presented in a historical context it makes them more palatable, more understandable and more interesting: the theory of the optimal colocation of decision rights within the specific knowledge framework of organizations is supported in Catholic orders. They decentralize their local communities the higher the ratio of credence goods produced, and centralize their local communities the higher the ratio of search/experience goods produced.