The Media and Firm Reputation Roles in Corporate Governance Improvements: Lessons from European Dual Class Share Unifications

Abstract

Manuscript Type. Empirical.

Research Questions/Issues. Do media pressure and firm reputational concerns propel corporate governance improvements? Specifically, can they encourage unifications of dual class shares into a single “one share one vote” class?

Research Findings/Insights. Media criticism increases the likelihood of voluntary dual class share unifications. Firms more sensitive to public image are more likely to unify their dual class shares.

Theoretical/Academic Implications. Media plays an important role in corporate governance promotion. Firm reputation is a valuable asset, sensitive to public opinion and media criticism. Some real firm decisions can be influenced by firm image and reputation considerations.

Practitioner/Policy Implications. Firm image, reputation, and public relations activity are valuable. Media is a powerful and flexible tool that in some cases can substitute regulation in effectively restraining firms and their controlling shareholders.

Keywords: Corporate Governance, Dual Class Shares, Firm Reputation, Media Impact