The Enforcement of Corporate Governance Codes

Wymeersch, Eddy

doi:10.1080/14735970.2006.11419948

Cited by 18 publications

(14 citation statements)

References 2 publications

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“…The Dutch code is based on the comply-or-explain principle. Whereas in most European countries the model followed is that of self-regulatory monitoring (Wymeersch 2006), this does not apply to the Netherlands. Reflecting an amendment to an EU Directive, Dutch law requires a listed firm to include a so-called compliance statement in the annual report, in which the firm has to explain its non-compliance with specific recommendations of the Dutch code.…”

Section: Corporate Governance In the Netherlandsmentioning

confidence: 99%

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Uniformity as response to soft law: Evidence from compliance and non‐compliance with the Dutch corporate governance code

Hooghiemstra

Ees

2011

Regulation & Governance

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The objective of the paper is to examine how firms have dealt with the trade‐off between flexibility and uncertainty that is characteristic for the decision‐making of firms in coping with self‐regulatory initiatives in general and the comply‐or‐explain principle in corporate governance in particular. Using unique data for 126 listed Dutch firms, we find that firms respond to this self‐regulatory initiative by largely complying with the code recommendation, possibly out of fear that the firm's reputation may be damaged. Furthermore, we find evidence suggesting that firms confine themselves to adopting a specific set of code recommendations and use similar arguments to explain non‐compliance. Our findings indicate uniformity in adopting the standard of good governance which is not in line with the logic of corporate governance codes and casts doubt on the effectiveness of this form of soft law. Overall, the paper's findings indicate that more restrictive (regulatory) instruments may be necessary to make firms conform to the spirit of codes.

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Section: Corporate Governance In the Netherlandsmentioning

confidence: 99%

“…Corporate governance codes (hereafter: codes) are a specific form of soft law (e.g. Thomsen 2006;Wymeersch 2006;Karlsson-Vinkhuyzen & Vihma 2009) that gained in importance for business firms in the past two decades (e.g. Zattoni & Cuomo 2008;Aguilera & Cuervo-Cazurra 2009).…”

Section: Introductionmentioning

confidence: 99%

Uniformity as response to soft law: Evidence from compliance and non‐compliance with the Dutch corporate governance code

Hooghiemstra

Ees

2011

Regulation & Governance

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“…The interaction with the legal system is a complex matter that differs considerably from state to state, both due to differences in the legal status of the codes, but also due to differences in the environing legal system'. 153 Research by sociologists, lawyers, cultural psychologists and economic historians on evolution, path dependency and embeddedness suggests that the relationships between regulatory instruments and causal outcomes cannot adequately be captured by the use of dichotomies. Often-employed dichotomies include the state and the market, 154 markets and hierarchies, 155 public and private 156 or the firm and its environment: 'Such dichotomies construct divisions between two opposing, mutually exclusive categories.…”

Section: March 2009 'New Governance' In European Corporate Law Regulamentioning

confidence: 99%

'New Governance' in European Corporate Law Regulation as Transnational Legal Pluralism

Zumbansen

2008

SSRN Journal

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“…This is important because existing theory and practices suggests that the process of providing for more flexible law, such as those provisions introduced by best practice recommendations, fails to control for the distinctively mandatory characteristics of its "comply or explain" features (Wymeersch 2005).…”

Section: A Introductionmentioning

confidence: 99%

A Legal Options Approach to EC Company Law

Hertig¹,

McCahery²

2006

Investor Protection in Europe

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In recent years, legal options have gained acceptance in the European Union. Legal options refer to the ex ante and ex post choices that are created by law. Not surprisingly, legislators have tended to introduce choice for Member States or private parties when they have found it difficult to make headway with resolving a conflict. This chapter contends that allowing firms the choice of different legal rules would be beneficial and would respond to industry demands for low-cost regulatory choices. It shows that bringing options to the forefront of company law reform can reduce costs for small and medium-sized firms, and provide clear benefits to companies that differ in their ownership and control structure from most large public corporations. Switching to a company law regime with different sorts of options can have a good effect on stakeholders as well. As a regulatory strategy, it advocates a step-by-step change, beginning with the adoption of a limited number of opt-in provisions.

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The Enforcement of Corporate Governance Codes

Cited by 18 publications

References 2 publications

Uniformity as response to soft law: Evidence from compliance and non‐compliance with the Dutch corporate governance code

Uniformity as response to soft law: Evidence from compliance and non‐compliance with the Dutch corporate governance code

'New Governance' in European Corporate Law Regulation as Transnational Legal Pluralism

A Legal Options Approach to EC Company Law

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