Codes of Good Governance

12 Pages Posted: 9 Jun 2009

See all articles by Ruth V. Aguilera

Ruth V. Aguilera

Northeastern University - Department of International Business and Strategy

Alvaro Cuervo-Cazurra

Northeastern University - Department of International Business and Strategy

Multiple version iconThere are 2 versions of this paper

Abstract

Research Question/Issue: We review the recent developments in the area of codes of good governance, a set of best practice recommendations regarding the behavior and structure of the board of directors.

Research Findings/Results: Our review of the literature on codes of good governance highlights their rapid spread around the world and how academic research has lagged behind in analyzing this topic. Despite the criticism that the codes' voluntary nature limits their ability to improve governance practices, codes of good governance appear to have generally improved the governance of countries that have adopted them, although there is need for additional reforms.

Theoretical Implications: Unfortunately, research on codes of good governance has developed in insolation with little cross-fertilization across the different disciplines.We propose a multi-level framework to discuss three main topics that have emerged within the codes literature: the motivations behind the diffusion of codes across countries and its implications for convergence of corporate governance practices; the content of the codes and their comply or explain dimension; and the relationship between code compliance and firm performance. We conclude by proposing four areas of future research.

Practitical Implications: Code development, adoption, and compliance are directly related to issues surrounding the governance of the firm, and in particular to all the interactions that a director has inside and outside the firm. Codes are regulations that emerge from policy-making negotiations between multiple stakeholders, such as the state (via the stock market regulators) and the investors.

Suggested Citation

Aguilera, Ruth V. and Cuervo-Cazurra, Alvaro, Codes of Good Governance. Corporate Governance: An International Review, Vol. 17, Issue 3, pp. 376-387, May 2009. Available at SSRN: https://ssrn.com/abstract=1416355 or http://dx.doi.org/10.1111/j.1467-8683.2009.00737.x

Ruth V. Aguilera (Contact Author)

Northeastern University - Department of International Business and Strategy ( email )

Boston, MA 02115
United States

Alvaro Cuervo-Cazurra

Northeastern University - Department of International Business and Strategy ( email )

D'Amore-McKim School of Business
313 Hayden Hall, 360 Huntington Avenue
Boston, MA 02115
United States
16173736568 (Phone)
16173738628 (Fax)

HOME PAGE: http://cuervo-cazurra.com

Register to save articles to
your library

Register

Paper statistics

Downloads
1
Abstract Views
3,344
PlumX Metrics