Measuring Corporate Governance: Objectives and Solutions by Comparison
Posted: 18 Apr 2011
Date Written: April 1, 2011
Many indicators have been developed at international level to evaluate the quality of corporate governance. In this paper, the fundamental elements and limitations of existing indicators are discussed. Among these indicators, particular attention has been focused on the GIM Index, an index utilized by numerous economists in empirical analyses on U.S. firms.The paper emphasizes the difficulty of the GIM Index to reflect the type of governance that characterizes enterprises operating in continental European countries. In order to evaluate the quality of governance of European firms a specific model (SIR Index) is formulated taking into account the main variables useful in understanding the asymmetry existing between minority and majority shareholders.
Keywords: Corporate governance, Governance index , GIM Index , SIR Index
JEL Classification: G34, G38
Suggested Citation: Suggested Citation