The Convergence of Corporate Governance Practices in Global Firms

Lindop, Charlotte (2012) The Convergence of Corporate Governance Practices in Global Firms. [Dissertation (University of Nottingham only)] (Unpublished)

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The matter of convergence in corporate governance practices has gained prominence in recent years as it becomes apparent that globalization in the capital markets has led to the expectation of transparency and accountability by investors, traits typically associated with firms based in the United Kingdom and United States. Whilst there is some argument for why there may be a persistence of diversity in corporate governance practices, there is more support for the view that there will be a convergence. Along with a number of others forces, including the failure of alternative systems, the status of Anglo-American firms as leaders in the global economy, and regulatory requirements, globalization, which as now moved into the realm of corporate governance, is pushing convergence to one globally accepted standard.

Despite extensive academic discussion on the topic of the convergence of corporate governance systems, very limited empirical analysis of the subject has been undertaken. Using a similar methodology to that employed by the Makarian et al (2007) paper “The Convergence of Disclosure and Governance Practices in the World’s Largest Firms”, this study focuses on the corporate governance practices employed by the company boards in sixty-three global firms between the years 2002 and 2010, in an attempt to test the hypothesis that non Anglo-American firms’ corporate governance practices are converging towards the practices employed by Anglo-American firms.

Convergence was found for several of the governance practices included in the sample, supporting the hypothesis that there has been a convergence of governance practices towards the Anglo-American model. However, the extent of convergence is not as strong as expected, and there was a finding of divergence in the case of one governance practice. The reason for this may be that whilst there has been a convergence towards Anglo-American practices from non Anglo-American firms, Anglo-American corporate governance practices have also evolved. Additionally, Japanese firms showed very little signs of converging to the Anglo-American model, which reduced the overall convergence found for the sample of non Anglo-American firms.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 04 Apr 2013 13:13
Last Modified: 12 May 2016 20:46

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