Mandating Corporate Behavior: Can One Set of Rules Fit All?

Standard & Poor's, Spring 2006

20 Pages Posted: 11 Jun 2006

See all articles by Hal S. Scott

Hal S. Scott

Harvard Law School

George S. Dallas

F&C Investments; European Corporate Governance Institute (ECGI)


In this monograph we address several interrelated themes influencing the corporate governance debate in today's financial marketplace. These include board independence and effectiveness; the role and the independence of the auditor; shareholder rights and activism; and convergence to a global corporate governance system. Our multi-jurisdictional approach sheds light on fundamental differences in existing governance practices globally given differing approaches to the role of the board, audit practices and ownership structure.

We argue that no one system of corporate governance is the benchmark for all companies in all jurisdictions and no system of governance is without its own vulnerabilities. We address comparative aspects of corporate governance practices, including those between the US and UK, and observe that within an Anglo American context the UK offers a viable alternative approach to the US regulatory environment through its comply or explain framework, which includes advantages of being less prescriptive and legalistic. We conclude that while voluntary corporate governance standards have important benefits of flexibility over more prescriptive approaches to governance regulation, investors must take responsibility and play an engaged role in making the comply or explain system a credible alternative to a more prescriptive approach to corporate governance regulation. This raises the role of investor governance as a key component of the overall system of corporate governance.

JEL Classification: G34, G38, M47, M49

Suggested Citation

Scott, Hal S. and Dallas, George S., Mandating Corporate Behavior: Can One Set of Rules Fit All?. Standard & Poor's, Spring 2006, Available at SSRN:

Hal S. Scott (Contact Author)

Harvard Law School ( email )

1557 Massachusetts Avenue
Cambridge, MA 02138
United States
617-495-4590 (Phone)
617-495-9593 (Fax)

George S. Dallas

F&C Investments ( email )

Exchange House
Primrose Street
London, EC2A 2NY
United Kingdom
+44 (0) 20 7011 4246 (Phone)

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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