Board Structure in the UK and Germany: Convergence or Continuing Divergence?

Davies, Paul

doi:10.2139/ssrn.262959

Cited by 24 publications

(26 citation statements)

References 2 publications

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“…Examples of firms controlled by institutional owners include Kaufman & Broad and Rexel in France, and Vedanta Resources in the UK. When ownership is diffused, it is difficult for dispersed shareholders to coordinate their monitoring activities and it is not worthwhile for each investor to monitor the company on a continuing basis due to the free-rider problem (Aguilera, 2005;Davies, 2002;Grossman & Hart, 1980). Consequently, the problem of misalignment of interests between shareholders and managers arises, with managers and shareholders having different degrees of access to firmspecific information, and strong managers engaging in selfserving activities that may be detrimental to shareholders' wealth maximization.…”

Section: Corporate Governance Bundles and Roles Of Outside Directors mentioning

confidence: 99%

National Governance System, Corporate Ownership, and Roles of Outside Directors: A Corporate Governance Bundle Perspective

Yoshikawa

Zhu

Wang

2014

Corporate Governance

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Manuscript Type: ConceptualResearch Questions/Issues: We explore why and how the different combinations of governance practices at national level, such as the legal system, conduct codes, and capital markets, and at firm level, such as various types of controlling shareholders, enable or constrain outside directors to engage in their monitoring and resource provision roles. Building upon such analysis, we develop a new taxonomy of corporate governance systems according to the different configurations of a set of interdependent governance characteristics, including national governance mechanisms, identity of block shareholders, and functions of outside directors. Research Insights: This study enriches the growing body of research on governance complementarity and substitution by highlighting the role of bundles of governance practices in influencing directors' engagement in governance behavior, and consequently advancing our understanding of variation in corporate governance systems across and within countries. Theoretical/Academic Implications: This paper demonstrates that the roles of outside directors depend on the interaction between a bundle of governance mechanisms rather than any individual mechanisms. The paper also goes beyond the traditional governance models based on the national context and highlights that interdependencies of corporate governance practices play an important role in explaining the diversity and variation of corporate governance arrangements across firms in both industrialized economies and emerging markets. Practitioner/Policy Implications: This paper provides insights to policymakers by suggesting that not all the governance bundles are conducive to managerial monitoring and resource provision by outside directors.

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Section: Corporate Governance Bundles and Roles Of Outside Directors mentioning

confidence: 99%

National Governance System, Corporate Ownership, and Roles of Outside Directors: A Corporate Governance Bundle Perspective

Yoshikawa

Zhu

Wang

2014

Corporate Governance

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“…First, we propose that monitoring by the board of directors will be more important when ownership is diffused. This is so because dispersed shareholders, individually, not only lack the incentives and abilities to monitor management directly, but also find it challenging to coordinate their monitoring efforts (Davies, 2002;Aguilera, 2005). By contrast, controlling shareholders do not typically rely as much on the board to monitor management.…”

Section: Introductionmentioning

confidence: 99%

When Does Ownership Matter? Board Characteristics and Behavior

et al. 2012

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“…Berle (1958) documents that some types of ownership structure such as ownership concentration are required to alleviate agency problems. In other words, concentrated ownership monitor management activities directly and possess incentives and abilities to oversight management and hold them for the accountability of actions not align with shareholders' interests (Davies, 2001;Aguilera, 2005). In addition, concentrated ownership works extensively to enhance firms' long-term value creation abilities.…”

Section: Corporate Ownership and Control Structurementioning

confidence: 99%

Ownership Patterns and Control of Top 100 Turkish Listed Companies

Mustafa¹,

Ahmad²,

Sitraselvi³

et al. 2017

AJFA

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This study aims to highlight the importance of protecting investors' rights,and particularly those of minority shareholders. This study addresses the predominant control-ownership structure of the top 100 firms listed in Bursa Istanbul (BI) using the data for 2015. It shows the most common control-ownership structure within business groups, in which shareholders exercise control over a group of firms and maintain a small stake of firms' equities. Turkish firms are categorised with highly concentrated ownership and families' being the dominant shareholders owning more than 80% of all publically listed firms in BI. The study results indicate that the divergence between cash rights and control rights (wedge)in the top 100 Turkish firms is mainly achieved through pyramidal-ownership structure, dual class shares,

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Board Structure in the UK and Germany: Convergence or Continuing Divergence?

Cited by 24 publications

References 2 publications

National Governance System, Corporate Ownership, and Roles of Outside Directors: A Corporate Governance Bundle Perspective

National Governance System, Corporate Ownership, and Roles of Outside Directors: A Corporate Governance Bundle Perspective

When Does Ownership Matter? Board Characteristics and Behavior

Ownership Patterns and Control of Top 100 Turkish Listed Companies

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