International corporate governance

Table: International corporate governance - Tentative characterizations of legal and empirical state of large firm decision systems in various countries as of 1980-1995:

Developing countries
Germany
Japan
Anglo-American countries
Denmark

Introduction: Some of the characterizations can be found in Shleifer and Vishny [1996, pages 49-55]. Precautionary statement: The first version of this table was primarily made out of memory and consequently it lacks adequate references and may contain errors about the actual legal and empirical state of the different institutions. As time passes more references will be added.

Tentative characterizations of legal and empirical state of large firm decision systems in developing countries as of 1980-1995

A) Laws on self-dealing among top-managers.

Legal state: Regulation is non-existing or very vague.

Empirical state: Self-dealing seems to be widespread especially with regard to government owned firms. It matters less for family owned firms since they typically deal with their own money.

B) Laws on outright theft by top-managers.

Legal state: Regulation is non-existing or simply not enforced by courts.

Empirical state: In Russia non-owner managers of newly privatized firms have been observed to steel the majority of the shareholder return without getting punished by courts.

C) Laws on corruption.

Legal state: Regulation is non-existing or very vague.

Empirical state: Corruption seems to be widespread especially with regard to government owned firms. It matters less for family owned firms since they typically deal with their own money.

Tentative characterizations of legal and empirical state of large firm decision systems in Germany as of 1980-1995

A) Laws on self-dealing among top-managers.

Legal state: Tough regulation: Self-dealing by management is impeded in the two-tier system.

Empirical state: Self-dealing does not appear to be a problem. For example, executive remuneration is far more modest than in the Anglo-American system.

B) Laws on outright theft by top-managers.

Legal state: Tough regulation and the crime is typically more easy to prove in court when it accounts for a significant amount of money.

Empirical state: Outright theft by top-managers in large firms is a very seldom phenomenon.

C) Laws on corruption.

Legal state: Tough regulation and corruption is typically more easy to prove in court when it accounts for a significant amount of money.

Empirical state: Corruption by top-managers in large firms is a probably a seldom phenomenon.

Tentative characterizations of legal and empirical state of large firm decision systems in Japan as of 1980-1995

A) Laws on self-dealing among top-managers.

Legal state: Tough regulation: Self-dealing by management is impeded as a result of their multi-people board system.

Empirical state: Self-dealing does not appear to be a problem. For example, executive remuneration is far more modest than in the Anglo-American system.

B) Laws on outright theft by top-managers.

Legal state: Tough regulation and the crime is typically more easy to prove in court when it accounts for a significant amount of money.

Empirical state: Outright theft by top-managers in large firms is a very seldom phenomenon.

C) Laws on corruption.

Legal state: Tough regulation and the crime is typically more easy to prove in court when it accounts for a significant amount of money.

Empirical state: Corruption by top-managers in large firms is probably a seldom phenomenon.

Tentative characterizations of legal and empirical state of large firm decision systems in Anglo-American countries as of 1980-1995

A) Laws on self-dealing among top-managers.

Legal state: The unitary board system of the UK and the US broaden the scope of self-dealing. However, recently laws have begun to require larger representation by independent directors and decisions to hire the firm’s auditor are required to be made by a majority of independent directors.

Empirical state: Self-dealing seems to be widespread with regard to decisions on executive remuneration.

B) Laws on outright theft by top-managers.

Legal state: Tough regulation and the crime is typically more easy to prove in court when it accounts for a significant amount of money.

Empirical state: Outright theft by top-managers in large firms is a very seldom phenomenon.

C) Laws on corruption.

Legal state: Tough regulation and the crime is typically more easy to prove in court when it accounts for a significant amount of money.

Empirical state: Corruption by top-managers in large firms is probably a seldom phenomenon.

Tentative characterizations of legal and empirical state of large firm decision systems in Denmark as of 1980-1995

A) Laws on self-dealing among top-managers.

Legal state: Tough regulation: Self-dealing by management is impeded in the two-tier system.

Empirical state: Self-dealing does not appear to be a problem. For example, executive remuneration is far more modest than in the Anglo-American system.

B) Laws on outright theft by top-managers.

Legal state: Tough regulation and the crime is typically more easy to prove in court when it accounts for a significant amount of money.

Empirical state: Outright theft by top-managers in large firms is a very seldom phenomenon.

C) Laws on corruption.

Legal state: Tough regulation and the crime is typically more easy to prove in court when it accounts for a significant amount of money.

Empirical state: Corruption by top-managers in large firms is a very seldom phenomenon.