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Corporate control and regulation: The explain mechanism as a sign of "capture"
Lund University, Sweden.
Jönköping University, Jönköping International Business School, JIBS, Business Administration. Jönköping University, Jönköping International Business School, JIBS, Centre for Family Entrepreneurship and Ownership (CeFEO).ORCID iD: 0000-0003-4961-1569
Linnæus University, Sweden.
Linnæus University, Sweden.
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2019 (English)Conference paper, Published paper (Refereed)
Abstract [en]

Corporate governance regulation is a contested area. The dispersion of corporate governance codes could on the one hand be seen as a regulator capture performed by international institutional investors, but on the other hand as support for status quo favoring strong local interests, due to local adaptation of code content. In this paper, these competing explanations are empirically tested through the analysis of noncompliance in number of explanations by Swedish listed corporations with different corporate control arrangements. The main findings are that corporations with a concentrated “Swedish” control situation (i.e. controlling shareholder holding more than 50% of the votes) comply more with the code and provide significantly less explanations than other corporations, whereas corporations controlled by owners in the range of 20 to 50% (which would then represent the typical Swedish business group arrangement) comply less with the code and provide significantly more explanations, as do to some extent (but not as robustly) corporations with dispersed ownership (or an “Anglo-American” control situation). This indicates that the Swedish code through a series of adaptations of the international blueprint favors very strong local controlling shareholders. This is to some extent surprising, as the process of code development was set up to favor controlling shareholders with more moderate stakes. Nevertheless, it is of course to some extent logical that the code would also favor the strongest actors in the Swedish corporate governance system. Still, the strongest effect on code compliance (or not) seem to derive not from ownership concentration and type, but from board and CEO characteristics, traditionally associated with their relative power structure. These findings have implications for how corporate governance codes should be understood in a global setting and what roles such codes could perform in a reform process aiming to change corporate governance arrangements.

Place, publisher, year, edition, pages
2019.
Keywords [en]
Corporate governance code, owner concentration, owner type, board of directors, CEO
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-48167OAI: oai:DiVA.org:hj-48167DiVA, id: diva2:1425391
Conference
11th Nordic Corporate Governance network, November 1-2, 2019, Oslo, Norway
Available from: 2020-04-21 Created: 2020-04-21 Last updated: 2020-04-21Bibliographically approved

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Larsson Olaison, Ulf

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CiteExportLink to record
Permanent link

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Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
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  • en-US
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  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
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  • text
  • asciidoc
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