Regulation and Comparative Corporate Governance

Abstract

This chapter discusses how regulation affects corporate governance from a broad perspective. First, we present the two main theoretical perspectives on regulation, namely principal-agent and governance. These two perspectives provide interesting insights for the study of regulation in corporate governance but remain incomplete to account for the presence of significant divergence in regulatory mechanism between national systems of corporate governance. We then examine the two main perspectives in studying regulation in corporate governance, namely law and economics, and politics. Third, we explore how regulation has different impacts on corporate governance practices across national systems of corporate governance through an incorporation of the concept of contexts. We conclude with a discussion of hard and soft law and its consequences for effectiveness in corporate governance around the world.

Keywords: corporate governance, regulation, comparative corporate governance