Culture and Corporate Governance: The Influence of Language and Religion in Switzerland

Management International Review, DOI: 10.1007/s11575-014-0216-5, Forthcoming

36 Pages Posted: 28 Aug 2013 Last revised: 13 Sep 2014

Date Written: September 12, 2014

Abstract

We investigate the effect of culture on corporate governance using the extraordinary opportunity that the corporate landscape of Switzerland provides. Within a single institutional framework (e.g., Swiss federal corporate law), we use language (German and French) and religion (Roman Catholicism and Protestantism) as proxies for culture. These groups share a distinct set of values particularly in their tolerance for hierarchical structures. We observe that firms in Swiss-French areas and firms in Roman Catholic cantons are more likely to have one-tier boards, whereas two-tier boards are more prevalent in Swiss-German areas and Protestant cantons. Furthermore, board composition is significantly driven by language. In contrast, ownership and equity structure are not significantly related to culture.

Keywords: Corporate Governance, Board of Directors, Ownership Structure, Culture, Language, Religion

JEL Classification: G30, G32, G34, G38, Z10

Suggested Citation

Volonté, Christophe, Culture and Corporate Governance: The Influence of Language and Religion in Switzerland (September 12, 2014). Management International Review, DOI: 10.1007/s11575-014-0216-5, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2316723 or http://dx.doi.org/10.2139/ssrn.2316723

Christophe Volonté (Contact Author)

University of Basel ( email )

Peter Merian-Weg 6
Basel, CH-4002
Switzerland

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