Corporate Governance Reforms in Continental Europe
University of Oxford - Faculty of Law; European Corporate Governance Institute (ECGI)
Paolo F. Volpin
City University London - Faculty of Finance; London Business School; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)
Journal of Economic Perspectives, Vol. 21, No. 1, pp. 117-140, Winter 2007
This essay first describes the differences in the ownership structure of companies in the three main economies of continental Europe - Germany, France, and Italy - with comparisons to the United States and the United Kingdom. Next, it summarizes the corporate governance issues that arise in firms with a dominant shareholder. Then, it provides a brief account of the major European corporate scandal, Parmalat, as an extreme example of investor expropriation in a family-controlled corporation. After outlining in general the legal tools that can be used to tackle abuses by controlling shareholders (internal governance mechanisms, shareholder empowerment, disclosure, public enforcement), it describes the corporate governance reforms enacted by France, Germany, and Italy between 1991 and 2005 and assesses the way in which investor protection in the three countries has changed.
Number of Pages in PDF File: 24
Keywords: Corporate Governance, Concentrated Ownership, Corporate Law Reform, Internal Governance, Shareholder Empowerment, Disclosure, Private Enforcement, Public Enforcement
JEL Classification: G18, G32, G34, G38Accepted Paper Series
Date posted: March 16, 2007
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