Corporate Governance Mechanisms: A Plea for Less Code of Good Governance and More Market Control

10 Pages Posted: 20 Jan 2003

See all articles by Alvaro Cuervo-Cazurra

Alvaro Cuervo-Cazurra

Northeastern University - Department of International Business and Strategy

Abstract

This paper provides a critical comparative analysis of corporate governance mechanisms in market-oriented (Anglo-Saxon) and large shareholder-oriented (Continental European) systems of corporate governance. Deficiencies in shareholder protection in the legal systems of both corporate governance systems have been addressed through the use of codes of good governance, a set of norms that regulate the behaviour and structure of the board of directors. However, the lower enforceability of norms in Continental Europe limits the applicability of such codes. Therefore, we argue that in Continental Europe, rather than promoting codes of good governance, it is necessary to expand market control mechanisms to facilitate the maximisation of firm value.

Suggested Citation

Cuervo-Cazurra, Alvaro, Corporate Governance Mechanisms: A Plea for Less Code of Good Governance and More Market Control. Corporate Governance: An International Review, Vol. 10, pp. 84-93, 2002. Available at SSRN: https://ssrn.com/abstract=312105

Alvaro Cuervo-Cazurra (Contact Author)

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

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