The Emergence of ‘Comply or Explain’ as a Global Model for Corporate Governance Codes

European Business Law Review (Forthcoming, 2022)

57 Pages Posted: 18 Feb 2021

See all articles by Iain MacNeil

Iain MacNeil

University of Glasgow - School of Law

Irene-Marie Esser

University of Glasgow; University of Stellenbosch

Date Written: January 29, 2021

Abstract

The introduction of the Cadbury Code in the UK in the early 1990s marked an important turning point in the evolution of corporate governance around the world. The ‘comply or explain’ approach pioneered by the Cadbury Code prioritised flexibility and the role of market discipline in its approach. While those characteristics can be linked to earlier trends in the evolution of corporate governance in the UK, it is more difficult to explain why the Cadbury Code has exerted so much influence over systems which differ from the UK in their approach and evolution. In this article we focus on the extent to which the ‘comply or explain’ approach has been adopted in other countries and attempt to explain why this has occurred. We propose three explanations for the diffusion of ‘comply or explain’ codes around the world and undertake qualitative and quantitative (leximetric) analysis to test these propositions.

Keywords: Corporate governance, codes, ‘comply or explain’, listed companies, disclosure, transplantation

Suggested Citation

MacNeil, Iain and Esser, Irene-Marie, The Emergence of ‘Comply or Explain’ as a Global Model for Corporate Governance Codes (January 29, 2021). European Business Law Review (Forthcoming, 2022), Available at SSRN: https://ssrn.com/abstract=3775736

Iain MacNeil (Contact Author)

University of Glasgow - School of Law ( email )

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Glasgow, Scotland G12 8QQ
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+44 141 330 5863 (Phone)
+44 141 330 4900 (Fax)

Irene-Marie Esser

University of Glasgow ( email )

School of Law
Glasgow, Scotland G12 8LE
United Kingdom

HOME PAGE: http://www.gla.ac.uk/schools/law/staff/irene-marieesser/

University of Stellenbosch ( email )

Private Bag X1
Stellenbosch, Western Cape 7602
South Africa

HOME PAGE: http://blogs.sun.ac.za/law/handelsreg-mercantile-law/

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