On the Convergence of National Corporate Governance Systems

Abstract

Some scholars have argued that the corporate governance systems of the major economies are likely to converge towards the economically best system at a rapid pace, while others maintain that such convergence will not occur because of a variety of forms of path dependence. In this article we first describe the evolution of the different systems. Then we search for evidence that convergence of corporate governance is correlated with globalisation, i.e. governance systems will converge to a certain degree and that the fear of an “inefficient convergence” is unfounded. We do so by describing the present efforts for a unification of the corporate governance systems. The number of standards-setting bodies and multilateral institutions that have been set up in recent times to foster good corporate governance worldwide is testimony to the heightened interest in this particular issue. In addition we present arguments for a further harmonisation and weaken the theories against it. We conclude that the systems will converge because the pressure of change is stronger than the tendencies of persistence. In addition we argue that systems composed of useful elements of different systems can be optimal.

Multiple influences on corporate governance practice in Nigeria: Agents, strategies and implications

“…Adapted from Gedajlovic (1993:53-54) The growing economic globalisation (and in particular, the competition for global commerce) has stimulated vigorous debates on the similarities and differences between national corporate governance systems; it has particularly highlighted the emergence of a single 'international best' approach to corporate governance (McCahery and Renneboog 2002). Research evidence as represented in the extant literature on the convergence of national corporate governance systems suggests that the 'international best model' mirrors the shareholder model (Shleifer and Vishny 1997;Hansmann and Kraakman 2001;Braendle and Noll 2006;Goergen, Martynova and Renneboog 2005). Indeed discussants, especially law, finance and economics academics tend to emphasise the superiority of the Anglo-Saxon shareholder oriented corporate governance model (Goergen, Martynova and Renneboog 2005).…”

“…For example, Shleifer and Vishny (1997) reported that corporate governance systems in Germany and Japan indicate a trend towards uniformity with the US. It has also been noted that one of the principal factors driving economies towards convergence to the Anglo-Saxon model is the failure of alternative models (Shleifer and Vishny 1997;Braendle and Noll 2006).…”

“…Comparative corporate governance scholarship has continued to pay attention to the convergence of national systems of corporate governance (for example see: O'Sullivan 2003;Dnes 2005;Liu 2005;Kuljak 2007;Aguilera, Filatotchev, Gospel and Jackson 2008;Zhang 2009). Despite the conflicting pieces of evidence, which appear to dominate the literature, the debate seems tilted in favour of an emerging convergence on the Anglo-Saxon shareholder model of corporate governance (Shleifer and Vishny 1997;Rubach and Sebora 1998;Lane 2003;Goergen, Martynova and Renneboog 2005;Braendle and Noll 2006). However, two important perspectives have received very limited attention in this debate.…”

“…These three major actors are namely: The rationale behind the choice of these three actors is three-fold. First, they have received limited attention in the extant literature on corporate governance convergence (for example, see Rubach and Sebora 1998;Corporate Board 2001;Goergen, Martynova and Renneboog 2005;Braendle and Noll 2006). Second, and in relation, their choice is in line with the budding literature on the 'agents of convergence' (see Soederberg 2003) as well as the substantial reports in the general media and by the organisations themselves in terms of their cross-border corporate governance alignment activities, especially as it relates to corporate governance diffusion to developing economies.…”

Firm-Level Determinants of Board System Choice: Evidence from Russia

“…This result needs to be interpreted from a new angle to explain the causality between business internationalization and management control systems in Russia. As advocated by Cohen and Boyd (2000) and Braendle and Noll (2006), the globalization wave throughout the international community forces companies, especially those active in overseas fund procurement and foreign business development, to adopt an internationally standardized corporate governance system. This trend is also noticeable in Russia, where integration with the world economy is advancing.…”