Convergence in Corporate Governance Toward US Model? Evidence from Global Petroleum Industries

Abstract

The results of our empirical investigation indicate that, on average, corporate governance features in the 80 largest oil and gas companies around the world have changed considerably in the wake of the landmark case of Enron and the 2008 global financial crisis. Both listed non-U.S. firms and listed U.S. oil and gas firms have increased the proportion of outside directors on the board and have reduced CEO-Chairman duality over the period 2005-2015. This decreasing CEO-Chairman duality trend for listed U.S. firms is more pronounced after 2010 than before, possibly reflecting greater sensitivity toward the role of CEO-Chairman in corporate governance issues. Interestingly, on average, during the period 2005-2015, listed U.S. firms have higher proportions of outside directors on the board than listed non-U.S. firms do, but listed U.S. firms are also more likely to have CEO-chairman duality relative to non-listed U.S. firms. Furthermore, the relatively more stable trend of CEO-Chairman duality in listed non-U.S. firms may imply that the corporate governance trend in the listed U.S. firms may not be followed closely by some listed non-U.S. firms.

Keywords: Corporate Governance, Energy Finance

JEL Classification: G34, Q40