Corporate governance in Scandinavia: comparing networks and formal institutions

Abstract

This article addresses the role of formal institutions and informal networks on corporate governance practices. The existing corporate governance literature has mostly examined the formal institutions, such as the effect of legal systems. Our contribution is to consider the effect of informal ‘small world’ characteristics of ownership and board networks. We use the case of Scandinavia (Denmark, Norway and Sweden) to examine these effects. Our empirical results reveal large differences in formal board and ownership structures between the Scandinavian countries, but strong similarities in terms of law enforcement, political stability, government effectiveness, rule of law, control of corruption as well as voice and accountability. We find that all three countries can be characterized as ‘small worlds' in which trust, information diffusion and reputation mechanisms are active governance mechanisms.

Environmental attitudes associated with large-scale cultural differences, not local environmental conflicts

“…They also share the same carnivore populations and the same obligations to large carnivore protection, though their carnivore population abundances differ significantly (Woodroffe et al 2005;Otterlei & Sande 2010). Moreover, contemporary Scandinavia is thought to be homogenous across a range of social and economic factors, including law enforcement, political stability, political trust, government effectiveness, rule of law, redistribution of goods and benefits, as well as control of corruption and accountability (Svallfors 1999;Sinani 2010). In terms of management practices and environmental protection, Norway and Sweden tend to be characterized as ecologically and politically similar (Gulbrandsen 2005;Gulbrandsen 2008).…”

Doxa of Shareholders and Owners: On the Threshold of Financialization

“…This renewed interest in the stock market was supported by tax reforms that favoured saving in shares. In 1990, the stock market capitalisation in relation to the GDP was 98 %; in 2000 it was 328 % (Sinani et al, 2008). The index on the Swedish stock market changed structure in 2007, but the last index equal to the one described above was at 370, i. e. 65 times the size in 1980 and 5 times the size in 1990 (Affärsvärldens index, 2007).…”

“…For example, Gilson (2006) used Sweden as an example of how controlling shareholders lower the agency cost associated with management more than they expropriated the minority shareholders. The explanation is said to lie in the social benefits of being regarded as a good controlling shareholder, and the social prestige following from this conception being high and coveted (Sinani et al, 2008;Stafsudd, 2009). A good reputation, therefore, seems important for the controlling shareholders, and the threat of reputation loss must be considered as a governance mechanism for controlling them.…”

Impact of Innovation and Places on Corporate Governance the Case of Wind Turbine Production

“…Existing theories have usually highlighted corporate governance performance in national systems without considering spatial decomposition into smaller geographic units than countries (see Kogut . A Scandinavian study of governance uncovers networks of highly connected directors, but theory and empirical evidence exploring how the recruitment of business groups is conditioned by homophily inside geographic spaces are lacking (Sinani et al 2008). Studies of financial market development suggest that venture capital formation is a highly localized activity, and investing at a distance is something venture capitalists tend to avoid (Bottazzi, Da Rin & Hellmann 2009).…”