Corporate Governance Regimes: Convergence and Diversity

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Joseph McCahery
Oxford University Press, 2002 - Business & Economics - 696 pages
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Corporate Governance Regimes addresses corporate law's leading question: whether one or another corporate law regime possesses relative competitive advantage. To this end, the editors have brought together an international team of scholars in economics and law to critically assess the newtheories of ownership and control which seek to explain the important efficiency advantages of dispersed ownership and the inevitable limitations of control-oriented systems of governance. Contributors describe and analyse the relative strength of the forces that shape the evolution of corporate law rules and practice. They also raise the issue of whether nations undertaking reforms should develop corporate governance policies that borrow from other systems' best practices, or pursuea course of internally designed corporate governance reforms. And, building on new theories of law and finance, they examine the incentives for introducing meaningful corporate governance reforms that disrupt or destabilize Europe's blockholding regimes.The collection is divided into seven parts. Part One provides not only a means for assessing the key features of market- and control-based systems of governance but a standpoint for determining whether national governance systems are likely to converge on a single, optimal system of governance. PartTwo introduces the reader to the building blocks of European corporate governance and the securities law harmonization program. Part Three examines the complex ownership and control structures that are found in Western Europe, investigating the consequences of large shareholdings for minorityinvestors. Part Four offers law and finance analyses of the relationship between legal and financial systems and corporate performance. Part Five looks at the economic perspective on the operation of the market for corporate control and the key legal rules and institutions of the bankruptcy andinsolvency regimes in the USA and Britain. Part Six is devoted to exploring the economic effect of institutional shareholder participation in corporate governance in the USA, Britain, and continental Europe. The final section, Part Seven, evaluates empirically the executive compensation arrangementsin the USA, Britain, and continental Europe. The contributions supply a pool of current research on the motivational effect of performance-related remuneration and the substantial increase in top executive remuneration in the USA.
 

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Contents

Introduction
1
Legal Convergence of Corporate Governance Regimes
21
Toward a Single Model of Corporate Law?
56
What are the Preconditions
83
Political Foundations for Separating Ownership from Control
113
The Emergence of
147
Part II Harmonization and Diversity of Governance Principles in Europe
173
The Need
205
On the Role
363
Effects on Firm Performance
386
The Value of Corporate Control and Reorganization of the Firm
419
Managerial Disciplining and the Market for Partial
441
A Comparison of English and American Bankruptcy Procedures
457
Reorganization Law and Dilution Threats in Different Financial Systems
470
Using Options to Divide Value in Corporate Bankruptcy
491
The Role of Institutional Shareholders in Corporate Governance
505

Convergence or Divergence in Corporate Governance
230
Prediction of Control Concentration
251
Who Controls German Corporations?
268
Share Price factions to CEO Resignations and Large Shareholder
297
How do Financial Systems Affect Economic Performance?
325
A Simple Model
343
Reducing the Costs of Proxy Voting
567
StockBased Executive Compensation
625
CashBased Executive Compensation in Spain and the UK
647
Employee Stock Option Grants and Firm Performance in the Netherlands
668
Index
679
Copyright

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About the author (2002)

Joseph A. McCahery is Professor of International Business Law at Tilburg University Faculty of Law and the Center for Company Law. He holds a visiting appointment at Leiden University Faculty of Law. Piet Moerland is Professor of Corporate Governance at Tilburg University where he teachescourses on mergers and acquisitions and corporate governance. M.J.G.C. (Theo) Raaijmakers is Professor of Corporate Law at Tilburg University Faculty of Law. Luc Renneboog is Associate Professor at the Department of Finance of Tilburg University and research fellow at the Center for EconomicResearch (Tilburg).

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