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Monitoring and Enforcement of Corporate Governance Codes
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
2015 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Purpose - The purpose of this thesis is to analyze the views of the stakeholders’ of the 2011 open public consultation conducted by the European Commission. We will examine the stakeholders’ approach to the authorization of market-wide monitoring bodies in EU to check the informative value of the companies’ explanations for deviations from national corporate governance codes.

Research design - This study is based on secondary data from an open public consultation conducted by the European Commission in 2011 which 408 stakeholders located both inside and outside the EU replied to; whereby a cross-sectional design is used. Furthermore, content analysis is applied and the data is categorized and analyzed through connecting to agency-, stewardship- and legitimacy theory by adopting a deductive approach.

Findings - The empirical findings show that the majority of the stakeholders are not in favor of authorizing a market-wide monitoring body to perform the informative value check of companies’ explanations. Most stakeholders instead believe in a stewardship approach where the task of monitoring and enforcing non-compliance with the ‘comply-or-explain’ principle is left to a company’s shareholders who possess a sufficiently level of company-specific information and have a strong financial interest in monitoring their investee companies. Further, the stakeholders believe that with the introduction of such an authorization of a market-wide monitor the flexibility of the ‘comply-or-explain’ principle would be lost.

Contribution - Monitoring is meant to increase the quality of companies’ explanations for deviations from the corporate governance codes, which in turn leads to the strengthening of investors’ decision-making as well as the access to quality information for other stakeholders. However, there is a conflict between whether or not market-wide monitoring actually contributes to sufficiently informative corporate governance statements. This study attempts to shed some light on the field of market-wide monitoring and enforcement of corporate governance codes through building upon and contributing to existing re-search. The empirical findings presented in this study contribute to international standard-setters such as the European Commission, by addressing issues regarding the authorization of market-wide monitors to check the quality of companies’ explanations for deviations from national corporate governance codes, as put forward as a significant talking point in the “Green Paper” in 2011. This study also contributes to society at large by offering a profound analysis of a wide diversity of stakeholders’ views on the introduction of market-wide monitors and its implication on enforcement techniques and the ‘comply-or-explain’ principle.

Place, publisher, year, edition, pages
2015. , 55 p.
Keyword [en]
monitoring, enforcement, corporate governance, corporate governance codes, 'comply-or-explain' principle, informative value, market-wide monitors
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:hj:diva-27599ISRN: JU-IHH-FÖA-2-20150144OAI: oai:DiVA.org:hj-27599DiVA: diva2:841275
Subject / course
IHH, Business Administration
Supervisors
Examiners
Available from: 2015-07-20 Created: 2015-07-12 Last updated: 2015-07-20Bibliographically approved

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Citation style
  • apa
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