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Corporate Governance Reports
« on: July 12, 2009, 05:31:25 pm »
International Financial Corporate Governance
Financial Corporate Governance in France
In 2008, France ranks fifth in terms of gross domestic product among world economies and thus seemingly has a competitive economic system. However, the central role historically played by the state, as well as the recurrent criticism of the typical recruitment process of the CEOs of the main French corporations generally carry the suspicion of its corporate governance system lacking sufficient discipline to guarantee the competitiveness of these corporations.
National Corporate Law and Regulation
The legal basis of French corporate governance is composed of three basic laws approved during 2001-2005: (1) The law on new economic regulations of 2001 (loi sur les nouvelles régulations économiques) aimed at guiding France on the path towards sustainable growth by regulating the financial system, competition, and the corporation. Heavily influenced by the content of the existing codes of “best practice”, it had been conceived to guarantee a better balance of power between the different instances of control, by allowing for the separation of the functions of chairman of the board and CEO, by strengthening the control function of the board, by assuring a higher level of transparency with respect to remuneration, and by increasing the rights of minority shareholders. (2) The law on financial security of 2003 (loi de sécurité financière) was designed as the French response to the crisis of trust in financial markets brought about by the various scandals (Enron, Vivendi …). Besides strengthening the powers of the controlling authorities with the creation of the Financial Markets Authority (Autorité des Marchés Financiers, AMF) in an effort to achieve better investor protection, the law also aimed at improved legal controls. (3) The law on trust and modernization of the economy of 2005 (loi pour la confiance et la modernisation de l’économie) has strengthened legal obligations with respect to information concerning CEO remuneration, particularly its components and the criteria of evaluation.
Corporate Governance Codes
Various corporate governance codes have been drawn up by the employers’ associations (MEDEF and AFEP) under the names of the Viénot 1 & 2 reports and the Bouton report. The main recommendations on such issues as accountability, minority shareholder protection, director independence, board committees and transparency contained in the French corporate governance codes are very close to those published in other European countries, such as the Cadbury report in the UK. Companies have discretion in adopting the governance codes, but in spite of a lack of any legal requirement, there is strong informal pressure in favor of voluntary compliance on a “comply or explain” basis.
Stock Market and Market for Corporate Control
The financial market sometimes acts as a market for corporate control, where different management teams compete to eject underperforming incumbent managers, in particular through hostile public takeover bids. But, in fact, the takeover market much remains a virtual governance mechanism, which may in great part be explained by the typical ownership structure of French firms.

Ownership Structures
When compared to other leading nations, France appears to be the country with the most international corporate shareholder structure. This strong presence of institutional investors does not mean however that the latter generally hold controlling capital stakes, since only 11.3 % of the companies as of the end of 2002 had an institutional investor as the main shareholder, whereas the proportion was over 40 % for the United States and the United Kingdom. In fact, Faccio and Lang (2002) and Sraer and Thesmar (2006) show that over 60 % of all listed companies remain under the control of the founding family. Moreover, the French government plays an important role on France’s financial markets.
State Ownership and State Interventionism
In 2006, 755 companies were indirectly and 90 directly controlled by the French state. In addition to that, the state is minority shareholder of several other companies. The most important participations are managed by the Agence des Participations de l’État (APE), the state-owned bank Caisse des Dépôts et Consignations (CDC), and the sovereign fund Fonds Stratégique d'Investissement (FSI). On September 3rd 2008 the French government controlled approximately 15% of the market capitalization of the CAC40, France’s most important stock index, and approximately 12% of the CACNext20. It is therefore the most important investor at the Paris Stock Exchange.
State interventionism has a long tradition in France (“Colbertism”). Even after the important privatizations of the 1990s, the French government still intervenes in the capital markets to defend national interests. Recent cases concern GDF-Suez, Sanofi-Aventis, Alstom-Siemens, Société Générale, EADS and Eiffage to name only some.
Board of Directors
French law leaves corporations with the choice to either opt for a unitary or for a two-tier board system, the latter comprising a management board and a supervisory board. By the end of 2004, 76% of the CAC 40 (France’s leading stock index) companies had chosen the unitary board. This percentage is confirmed by larger samples, and it seems that the two-tier board system has been on the decline in recent years.
Concerning its composition, French law limits the number of internal directors (corporate employees) to a third of the board seats. The presence of independent directors has become commonplace on the boards of the CAC 40 companies, where they occupy 60 % of the board seats, and has become a widely accepted practice in most listed companies (with a mean value of 6 independent directors out of a total of 15). The legislation adopted in recent years has tended to reduce the number of board seats that can be held by one single person: by the end of 2004, 104 directors representing approximately a fourth of the CAC 40 board seats held more than one directorship, but there were only three who held up to five, henceforth the legal limit. About one third of the boards include one of the company’s bankers and an employee representative, and three fourths have at least one foreign director.

Informal Networks
The overall evolution of French corporate governance towards Anglo-Saxon standards encounters some resistance, especially due to the characteristics of the market for executives of the main companies, which favor certain elite circles – in 2005, almost 15 % of the CEOs of French listed companies were graduates from École Polytechnique and from École Nationale d’Administration (ENA) –, and due to the employment market in general, often considered to be rather inflexible. Informal networks of Grande École graduates still play in important role in decision taking in major French companies and government agencies.
During the last twenty years, the governance of French listed companies has undergone profound transformations, and its formal characteristics appear henceforth close to those of the Anglo-Saxon counterpart. However, even if foreign institutional investors have become its major actors, French capitalism still keeps a strong family character and transactions on the market for corporate control are rarely hostile. One may add that minority shareholder activism is modest, even though their rights have been strengthened. State interventionism and informal networks remain important factors in the French economy.
CHARREAUX, G., WIRTZ, P. (2007): Corporate Governance in France, in: KOSTYUK, N., BRAENDLE, U.C., APREDA, R., Corporate Governance, Virtus Interpress, pp. 301-310.
FACCIO, M., LANG, L. (2002): The Ultimate Ownership of Western European Corporations, Journal of Financial Economics, Vol. 65, Issue 3, pp. 365-395.
LEE, S.H., YOO, T., (2008): Competing Rationales for Corporate Governance in France: Institutional Complementarities between Financial Markets and Innovation Systems, in: Corporate Governance: An International Review, Vol. 16, Issue 2, pp. 63-76.
SRAER, D., THESMAR, D. (2006): Performance and Behavior of Family Firms: Evidence From the French Stock Market, ECGI Working Papers Series in Finance, Working Paper N° 130/2006, January.
Research by the author at the German Embassy in Paris, France.
« Last Edit: December 21, 2009, 04:59:23 pm by LK »

Offline Benjamin Guin

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« Reply #1 on: July 13, 2009, 01:16:23 am »
Chaebol in Corporate Governance in South Korea
What is Chaebol?
A chaebol is a South Korean form of a business conglomerate. The structure of Chaebol may be
characterized by two features: Firstly, their absolutely closed concentration of ownership within the
family of the founder and, secondly, their highly diversified business structure.2 Among the most
famous Chaebol are Samsung, Hyundai and LG.3
Characteristics of chaebol when compared with Japanese keretsu: 3
Firstly, Chaebol are still largely controlled by their founding families, while keiretsu are controlled
by groups of professional managers. Secondly, they are centralized in ownership, while keiretsu are
more decentralized. Thirdly, Chaebol often formed subsidiaries to produce components for exports,
while large Japanese corporations often employed outside contractors. Thirdly, Chaebol are
prohibited from owning private banks, partly in order to increase the government's leverage over the
banks in areas such as credit allocation.
The 1997 Financial Crisis and Reforms
In 1997, Korea experienced a series of Chaebol bankruptcies running up to the financial crisis (see
figure 1 for further details). Thus it was generally accepted to reconstruct Chaebol in the aftermath of
the crisis. Especially, the ownership concentration, which resulted in the lack of a proper corporate
governance mechanism was to be addressed by the government. A principal aim was to create an
Anglo-American corporate governance system.
The five-points of the accord, which became the main targets of President Kim’s chaebol policies
1. to hold chaebol leaders more accountable for managerial performances;
2. to boost managerial transparency;
3. to improve financial health;
4. to focus on core businesses;
5. to eliminate loan guarantees among affiliates. 2
In August 1999, President Kim Dae-jung announced a further three supplementary principles for
chaebol reform.
1. restrict chaebol control of the non-banking financial sector,
Benjamin Guin Homework 8 July 12, 2009
2. suppress circular investments and unfair transactions among chaebol affiliates
3. prevent improper bequests as gifts to chaebol heirs2
Besides an outside director system – similar the US American one – was introduced. From
January 2001, the obligation concerning outside directors was also enforced on large scale chaebol
affiliates, those with more than 2 trillion won of assets. More than ½ of all directors had to be from
outside the chaebol, and the minimum level was 3 outside directors.2However it remains
questionable whether this systems performs well.
Regarding the composition of ownership, the reforms mentioned above have promoted
substantial changes: Firstly, Bank ownership of shares saw a rapid increase after 2000. Besides,
foreign investors now hold around 12 to 15% of shares, but they have increased their share of the
market value from 17.98% 1998 to 36.01% 2002. 2
Figure 1
« Last Edit: August 05, 2009, 01:40:06 pm by Ted Azarmi »

Offline Jochen Schäfer

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Re: Homework
« Reply #2 on: July 14, 2009, 08:27:42 am »
My homework is attached.

Jochen Schäfer

Spain’s corporate governance reforms Jochen Schäfer
The first Spanish Code of Best Practice, the so called Olivencia report, a bundle of more than
20 recommendations that aimed to strengthen the supervisory role of the Spanish boards of
directors, was released in 1998. At the same time, other legal reforms concerning the
liberalization of markets and the privatization of former state-owned companies were
introduced by the Spanish government.
The 23 recommendations of the code dealt, amongst other things, with:
• improving the monitoring role of the board of directors
• establishing a majority of non-executive directors
• the need to disclose the managers’ pay details
• the minimum and maximum board size
• the retirement age for directors
• the protection of minority shareholders
Compliance with the recommendations of the code was not compulsory so at the beginning
most of the companies did not adopt the recommendations. They primarily opposed the
recommendations for the manager pay details, the retirement age of directors and the board
size. One could observe that privatized firms were more likely to adopt the code than “old
A second code followed in the year 2002, induced by several corporate scandals. The Aldama
report proposed new recommendations, e.g. concerning the information which has to be
provided by Spanish firms to the market. The government simultaneously introduced new
transparency laws, rules for take-overs, new rules for shareholder meetings and boards and the
co-operation with the Spanish Supervisory Agency. From that year on, companies had to
publish an annual corporate governance report and corporate governance information on the
web pages. In this report, the firms today have to answer more than 70 questions referring to
the ownership structure, the management, risk control systems and anti-take-over
amendments. When they do not fulfill the recommendations they have to declare why that is
the case (Anglo-Saxon “comply or explain” system).
The rules and laws mentioned above have led to significant improvements of the information
level of Spanish companies. Most of the big companies have adopted the new corporate
governance practices. Spanish companies improved also compared to other European
competitors on this field.
This development was a reaction to the dramatic fall of state ownership in the last years in
Spain. Thus, the companies have adopted a new “hybrid” corporate governance system,
combining elements of Anglo-Saxon models with other codes. As a result, a report dealing
with this subject states that “Spain is moving steadily from a state-led to a broadly stateenhanced
corporate governance and labor-relation system” (Heidrick and Struggles 2005).
Several reforms of the Spanish corporate governance system in recent years have led to
important improvements in corporate governance practices. New laws and the Code of Best
Practice have been central elements of this process which has not ended yet. In 2006 both the
Aldama and Olivencia reports were harmonized and the best recommendations of both were
included in a new code which also incorporates recommendations by the European Union and
other institutions.
Nevertheless, there are still some shortcomings within the system which have to be eliminated
in the future. Information regarding manager salaries provided by the companies is in many
cases unsatisfactory. There are on average still more executive directors on Spanish boards
than on boards in other European countries and, worth mentioning, gender diversity of
directors is still on a low level.
Gómez-Ansón, Silvia: Recent corporate governance developments in Spain. In: Mallin, Chris: Handbook on
International Corporate Governance. Edward Elgar Publishing, 2006
« Last Edit: August 06, 2009, 09:33:39 am by Ted Azarmi »

Offline ChristianHattendorff

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Re: Homework
« Reply #3 on: July 14, 2009, 04:44:13 pm »
Please find my homework attached.
Beste regards,
Christian Hattendorff

 Corporate Governance in Russia 07/15/09
Christian Hattendorff
While many argue that corporate governance models are converging, important differences
remain. All countries have a unique history, culture, and legal and regulatory framework, each
of which influences a company’s corporate governance framework. The following is a list of
features that characterize Russia’s corporate sector.
Concentrated ownership
Although the early 1990s witnessed a relatively dispersed ownership structure in the followup
to the privatization phase, most Russian companies today are controlled by a single
controlling shareholder or small group of shareholders. This holds true not only for the natural
resource sector, such as oil production and processing, but communications, metallurgy and
forestry as well. This concentrated ownership structure often results in minority shareholder
abuses. Insider dominance and the weak protection of external shareholders/investors have
largely contributed to the underdevelopment of the capital markets in Russia.
Little separation of ownership and control
Most controlling shareholders also act as the company’s General Director and sit on the
Supervisory Board. Those companies that do separate ownership and control often do so only
on paper. Such companies typically suffer from weak accountability and control structures
(effectively, the majority/controlling shareholders oversee themselves in their function as
directors and managers), abusive related party transactions, and poor information disclosure
(insiders have access to all information and are unmotivated to disclose to outsiders).
Unwieldy holding structures
Major business groups in the form of holding companies control companies in most
industries. While holding structures can serve legitimate purposes, complex business
structures, cross-shareholdings and other arrangements to create opaque ownership structures
can make the company difficult to understand for shareholders and investors. Such structures
are often used to expropriate and circumvent the rights of individual shareholders. Poor
consolidated accounting is a further corporate governance issue that has yet to be tackled.
On the other hand, many of these holding structures are currently being reorganized for
various reasons. Some controlling shareholders have discovered a desire to build and run
proper businesses — based on good corporate governance — thus leaving a positive legacy
behind. Others seek to properly transfer their businesses to the next generation or sell their
stakes to outside investors. This process may still take place outside the legal system and is
often marked by conflicts, although many of the criminal takeovers that marked the 1990s
have subsided.
Inexperienced and inadequate Supervisory Boards
The concept of supervisory bodies was only introduced with Russia’s transition to a market
economy. Such a supervisory structure did not exist in state-owned enterprises during the
Soviet Union. General Directors often seek to bypass this supervisory structure, seeking direct
contact with the controlling shareholder (in as much as they are not one and the same person).
The role of Supervisory Boards often remains unclear, with some taking on authorities that
belong to the GMS and others becoming actively involved in the company’s day-to-day
management. Strong, vigilant and independent Supervisory Boards remain a rarity.
« Last Edit: August 06, 2009, 09:35:09 am by Ted Azarmi »

Offline leyre

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Re: Homework
« Reply #4 on: July 15, 2009, 01:53:48 pm »
please find my homework attached about Spanish Corporate Governance

best regard;
Leyre Torres

Corporate Governance in Spain
Leyre Torres

There were Until year 2005 in Spain two Code of Best Practice Olivenza (1998) and Aldama (2002). It was in this year when both codes were updated and unified in one only document. This new document was elaborated by Spanish Government (Department of Justice, Ministry of Economy), Bank of Spain and the private sector.
The Comisión Nacional del Mercado de Valores (CNMV) is the agency in charge of supervising and inspecting the Spanish Stock Markets and the activities of all the participants in those markets.
The purpose of the CNMV is to ensure the transparency of the Spanish market and the correct formation of prices in them, and to protect investors. The CNMV promotes the disclosure of any information required to achieve these ends, by any means at its disposal; for this purpose, it uses the latest in computer equipment and constantly monitors the improvements provided by technological progress.
The main beneficiaries of the CNMV's work are Spanish investors, to whom we must assure adequate protection. To this end, the CNMV focus particularly on improving the quality of information disclosure to the market, and particular efforts are made in the area of auditing and in developing new disclosure requirements relating to remuneration schemes for directors and executives that are linked to the price of the shares of the company where they work. Also, considerable efforts are made to detect and pursue illegal activities by unregistered intermediaries.
•   In 2000, the CNMV sent to the enterprises which trade in the stock market a questionnaire to evaluate their Corporate Governance. Only 67 answered. 77 % of them claimed to follow these recommendations (Olivenza recommendations) in a general way, 5 of them to comply strictly with them whereas another 5 assumed comply less than five.
•   “Our Enron case”: The bank Banesto were inspected on 1st november 1993, after having discovered a lack of 600000 millions of pesetas (= more or less 4.000.000 euros). This gap spread fear among the stakeholders (7 million of clients,  half million of shareholders, 15.000 workers and 50 enterprises in which  participated the bank).  In fact, the withdraw funds between 75.000 millions and 100.000 millions of pesetas. After some years of investigation, the CFO was convicted of unlawful appropriation, fraud and distorting documents.

« Last Edit: August 06, 2009, 09:36:16 am by Ted Azarmi »

Offline mary1405

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Re: Homework
« Reply #5 on: July 15, 2009, 11:23:17 pm »
International Financial Management Marion Mueller
1. Development of corporate governance in the UK
The UK's system of business regulation, which is principles rather than rules based, reduces
the cost to global businesses of introducing procedures to comply with detailed regulations,
many of which unnecessarily constrain business practice and innovation.
The UK has developed a market-based approach that enables the board to retain flexibility in
the way in which it organizes itself and exercises its responsibilities, while ensuring that it is
properly accountable to its shareholders.
In 1992 the Committee on the Financial Aspects of Corporate Governance, chaired by Sir
Adrian Cadbury, issued a series of recommendations - known as the Cadbury Report. The
Cadbury Report addressed issues such as the relationship between the chairman and chief
executive, the role of non-executive directors and reporting on internal control and on the
company's position. A requirement was added to the Listing Rules of the London Stock
Exchange that companies should report whether they had followed the recommendations or,
if not, explain why they had not done so (this is known as 'comply or explain').
The recommendations in the Cadbury Report have been added to at regular intervals since
1992. In 1995 the Greenbury Report set out recommendations on the remuneration of
directors. In 1998 the Cadbury and Greenbury reports were brought together and updated in
the Combined Code, and in 1999 the Turnbull guidance was issued to provide directors with
guidance on how to develop a sound system of internal control.
Following the Enron and WorldCom scandals in the US, the Combined Code was updated in
2003 to incorporate recommendations from reports on the role of non-executive directors
(the Higgs Report) and the role of the audit committee (the Smith Report). At this time the UK
Government confirmed that the Financial Reporting Council (FRC) was to have the
responsibility for publishing and maintaining the Code. The FRC made further, limited,
changes to the Code in 2006. Throughout all of these changes, the 'comply or explain'
approach first set out in the Cadbury Report has been retained.
2. The essential features of UK corporate governance
2.1. In general
Checks and balances:
• Separate Chief Executive and Chairman.
• A balance of executive and independent non-executive directors.
• Strong, independent audit and remuneration committees.
• Annual evaluation by the board of its performance.
· Supervisory model: Monistic
· General assembly: has all competencies which the board doesn’t have, but no decisional
International Financial Management Marion Mueller
2.2. The role and composition of the board
• A single board with members collectively responsible for leading the company and setting
its values and standards.
• A clear division of responsibilities for running the board and running the company with a
separate chairman and chief executive.
• A balance of executive and independent non-executive directors -for larger companies at
least 50% of the board members should be independent non-executive directors; smaller
companies should have at least two independent directors. The key aspects of corporate
governance in the UK
• Formal and transparent procedures for appointing directors, with all appointments and reappointments
to be ratified by shareholders.
• Regular evaluation of the effectiveness of the board and its committees.
2.3. Renumeration
• Formal and transparent procedures for setting executive remuneration, including a
remuneration committee made up of independent directors and an advisory vote for
shareholders. A significant proportion of remuneration is linked to performance.
2.4. Accountability and Audit
• The board is responsible for presenting a balanced assessment of the company's position
(including through the accounts), and maintaining a sound system of internal control.
• Formal and transparent procedures for carrying out these responsibilities, including an audit
committee made up of independent directors and with the necessary experience.
2.5. Relations with shareholders
• The board must maintain contact with shareholders to understand their opinions and
• Separate resolutions on all substantial issues at general meetings.
2.6. Role of shareholders
Under UK company law, shareholders have comparatively extensive voting rights, including
the rights to appoint and dismiss individual directors and, in certain circumstances, to call an
Extraordinary General Meeting of the company. Certain requirements relating to the AGM,
including the provision of information to shareholders and arrangements for voting on
resolutions, are also set out in company law, as are some requirements for information to be
disclosed in the annual report and accounts. These include requirements for a Business
Review (in which the board sets out, inter alia, a description of the principal risks and
uncertainties facing the company) and a report on directors' remuneration, on which
shareholders have an advisory vote. This framework is reinforced by the Listing Rules that
must be followed by companies listed on the Main Market of the London Stock Exchange.
The Listing Rules provide further rights to shareholders (for example, by requiring that major
transactions are put to a vote), and require certain information to be disclosed to the market.
International Financial Management Marion Mueller
3. What is so special about the corporate governance system in the
The key relationship is between the company and its shareholders, not between the
company and the regulator. Boards and shareholders are encouraged to engage in dialogue
on corporate governance matters. Shareholders have voting rights and rights to information,
set out in company law and the Listing Rules, which enable them to hold the board to
· Financial Reporting Council (2006): The UK Approach to Corporate Finance
· Jay Dahya (2000): The Cadbury Committee, Corporate Performance and Top Management
« Last Edit: August 08, 2009, 05:52:34 pm by Ted Azarmi »

Offline HannahHerrmann

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Re: Homework
« Reply #6 on: July 16, 2009, 09:16:03 am »

Hannah Herrmann

Corporate Governance in Egypt
Corporate Governance in Egypt is a novel term that has started to appear in the late 1990s.
The corporate legal framework has its origins in the French civil law. In October 2005, Egypt
adopted a draft Corporate Governance Code based on the principles of corporate governance
that were developed six years earlier by the Organization for Economic Cooperation &
Development (OECD).
There are three different types of companies in Egypt:
The first type is listed on the Cairo & Alexandria Stock Exchanges (CASE). Those companies
are subject to the Capital Markets Law (CML) and monitored by the Capital Market
Authority (CMA). The second type are state-owned companies, and the third
are family businesses, which are difficult to regulate.
1. Board structure
Companies have a single tier board which must have more than three members who are
shareholders. Most directors tend to be insiders or family members. Two “experts” may be
appointed to the board. Employees can’t be appointed before having at least served two years
in the company. There are no specific rules concerning the split between executives and nonexecutives,
board committees or concerning the role of the chairman. Often, the chairman and
the CEO are the same person. Directors only can be member of two different boards (The
managing director only of one board).
The board meets upon request of the chairman or one third of its members.
2. Remuneration
The board determines the remuneration for the CEO. Board remuneration must be disclosed at
the annual general meeting.
There is a significant difference in the level of compensation of executive and non-executive
members. The remuneration of non-executive members consists of setting fees and travel
expenses. Executive members receive an annual share of profit of about 10% of net income.
3. Shareholders
Companies can have different classes of shares with different rights. Generally, no person
may vote more than 10% of total shares at the annual general meeting. The
CMA is charged with protecting shareholder rights and developing the stock market.
4. Stakeholders
Stakeholders have a number of legal protections. They are protected by contract or specific
law, e.g. the labour act, environmental law or insolvency regime. Bankruptcy rules are subject
to the commercial code. Creditor rights are considered to be relatively weak in international
5. Accounting audit and disclosure
All companies have to submit quarterly and annual financials statements and a Board of
Directors report. The Egyptian Generally Accepted Accounting Principles (EGAAP) are
comparable to the IAS. Very few companies provide additional information.
« Last Edit: August 08, 2009, 05:54:21 pm by Ted Azarmi »

Offline annika.kasparek

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Re: Homework
« Reply #7 on: July 16, 2009, 02:54:15 pm »
Annika Kasparek

Corporate Governance in Sweden 1
Corporate governance, or bolagsstyrning in Swedish, deals with the manner in which companies are to be
run to meet the owners’ required return on invested capital and thus contribute to economic growth and
efficiency in society. The present-day concept of corporate governance emerged in the United States in the
mid-1980s. In Europe, it first gained widespread attention in the early 1990s. Since then, the concept has
evolved rapidly. In 1999 the OECD published its Principles for Corporate Governance, which have recently
been updated, and the EU has been working actively in this area for several years.
The Swedish Corporate Governance System in an International Context
- The Anglo-American versus the Continental European Model
From an international perspective, when characterizing different corporate government systems, an
important dividing line is usually thought to run between Anglo-American countries in the one side, and
continental European countries, particularly Germany, on the other side.
A primary difference is the ownership structure. Simply put, the large listed companies in the United States
and the United Kingdom have for a long time had a more dispersed ownership, while the ownership
structure in continental European countries often is more concentrated, i.e. there are typically one or a few
principal owners in the company. A more important difference, concerns the companies’ corporate
governance structure. A common, though somewhat simplified description, is that in Anglo-American
countries a one-tier governance model applies whereas in continental European countries, there is a two-tier
Characteristics of the one-tier model
e.g. Great Britain
- only one governance body in the company; no separate executive board
o the shareholder’s meeting, the company’s highest decision-making body, appoints the board of
directors, which is responsible for the company’s governance. The board’s mandate is decided
entirely by the shareholders’ meeting.
o Today the British corporate governance code (the Combined Code) prescribes that a majority of
the members of the board of directors must not be part of the executive management of the
o In the United Kingdom, employees have no legislated right to board representation.
The two-tier governance model
e.g. the German system
- divides the governance function between two governing bodies
o supervisory board (Aufsichtsrat) and management board (Vorstand).
- strict division of functions between the Aufsichtsrat and the Vorstand; the law forbids the same person to sit
on both boards.
o Vorstand: key governing body; responsible for the administration of the company.
o Aufsichtsrat: supervises the work of the Vorstand; may only intervene in the direct management of
the company in a very limited way.
- The shareholders’ meeting is the company’s highest decision making body.
o appoints the Aufsichtsrat which, in turn, appoints the Vorstand
o power of the shareholders’ meeting to influence the governing bodies’ activities through directions
and guidelines is extremely limited.
- German law also includes extensive regulations on employees’ representation on the company’s boards.
1Swedish Code of Corporate Governance- A Proposal by the Code Group;;
Sven Unger, Special features of Swedish Corporate Governance, The Swedish Corporate Governance Board,
The Swedish Corporate Governance Model
The Swedish corporate governance model lies somewhere in between the Anglo-American and the
continental European models in several respects. The Swedish corporate governance model lies somewhere
in between the Anglo-American and the continental European models in several respects.
General aspects of Swedish corporate governance
Ownership Structure
The ownership structure of most of the listed Swedish companies is closer to that found in continental
Europe than to that of large American and British listed companies. Many companies indeed have a
relatively large number of owners, but the majority of companies have one owner or a group of owners
whose shareholdings and number of votes in effect give them a controlling ownership position.
Corporate Governance Structure
Swedish company law has its historical roots in German law. Still the governance structure laid out in
Swedish law does not bear any resemblance to the two-tier form of governance. The prescribed
form of governance is basically closer to the British one-tier model. The company’s highest decisionmaking
bo The shareholders’ meeting elects the company’s board of directors, who, in turn,
appoint the company’s managing director.
Though being similar to systems of other industrialized countries, there are specific features that mirror a
market in which a few major shareholders often assume particular responsibility for a company.
The essence of Swedish corporate governance:
Ultimate power should rest with the share-holders.
Division of Powers and Transparency
- corporate governance based on legislation and self-regulation
- high degree of transparency
- clear divisions of powers and responsibilities between shareholders voting at shareholders’
meetings and working through nomination committees, non-executive boards responsible for
companies on behalf of shareholders, CEOs in charge of operations and auditors reporting to
- By law, the chair of the board and the CEO (Managing Director) of a listed company cannot be the
same person.
- Active participation by shareholders at shareholders’ meetings is seen as promoting a sound balance
of power between the shareholders, the board of directors and senior management.
- The board of directors can engage its own advisors at the company’s expense, and may also
authorise a committee of the board to do so.
- For elections, the Swedish Companies Act provides that the candidate receiving the largest number
of votes is elected. This plurality standard is mandatory under Swedish law. Hence, it is not
possible for a company to elect directors by a majority vote.
Protection of Minority Shareholders
The Swedish Companies Act contains a general provision protecting minority shareholders, under
which no decision which is likely to provide an undue advantage to a shareholder or another person
to the dis-advantage of the company or another shareholder may be adopted at a share-holders’
The Swedish Companies Act requires a minimum two-thirds majority of votes and shares at the
general meeting of shareholders to amend the articles of association. This provision is intended to
protect minority shareholders.
Annika Kasparek
« Last Edit: August 08, 2009, 05:55:56 pm by Ted Azarmi »

Offline Katha

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Re: Homework
« Reply #8 on: July 16, 2009, 03:03:11 pm »
Please find attached a comparison between German and Japanese corporate governance,

best regards, Katha

Offline Carolynna

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Re: Homework
« Reply #9 on: July 16, 2009, 03:43:33 pm »
Financial Corporate Governance in Canada
   By: Carolynna Gabriel

   Canada resembles the U.S. in its “market-oriented economic system, pattern of production, and affluent living standards”. ( Canada’s GDP has, in general, steadily increased over the past few decades. At the end of 2008, Canada’s GDP was ranked 11th largest in the world. ( Canada has experiences particular growth in the manufacturing, mining and service sectors. Canada’s main trading partner is the U.S. and has enjoyed a substantial trade surplus since the creation of NAFTA, allowing free trade between Canada, U.S. and Mexico.  (

Corporate & Securities Laws
What are they? Explain the difference
The corporate governance of Canadian public companies is regulated by corporate laws and security laws. Security laws are generally regulated on a provincial/territorial level. (Meaning that some laws in Ontario, for example, differ from those in Nova Scotia or Nunuvut.) Canadian companies may be incorporated under the federal Canada Business Corporations Act or a similar provincial/territorial status. The largest Canadian public companies are listed and traded on the Toronto Stock Exchange (TSX).

In general the Canadian approach to corporate governance is influenced by:
•   Relatively small size of the Canadian capital markets
•   large number of “small-cap” Canadian public companies
•   concentration of share ownership (over 25% of the largest 300 companies have a controlling shareholder)

For the past few years, Canadian corporate governance has been undergoing some reform, influenced by US initiatives such as the Sarbanes-Oxley Act (2002), and more recently, the financial crisis (end of 2008). The new Canadian Securities Administrators (CSA) rules, for instance, closely follow the Sarbanes-Oxley Act. The rules deal with (not limited to!) the following main issues:
•   Oversight of external auditors
•   CEO and CFO certification with respect to the accuracy of public disclosure and filings
•   Requirement that public companies have an audit committee composed of at least 3 directors, all of whom are independent and financially literate
•   Disclosure of corporate governance practices
•   Adopting a written code of business conduct and ethics

Canadian public companies must hold a general meeting of shareholders every 15 months to elect directors and to appoint auditors and authorize their remuneration. Generally, shareholders are entitled to one vote per share. Some Canadian public companies have a dual-class share structure, with one class having multiple voting rights.
Boards of directors of Canadian public companies are responsible for supervising the management of the company’s business and affairs. The officers (i.e. management) are appointed by the board and are responsible for day-to-day management. Typically there is a CEO, a CFO, one or more vice presidents and a secretary. Usually the CEO is a director, but not necessarily the chair of the board of directors. CSA Rules recommend that a majority of the directors be independent, but this is not required. Directors have a duty to act in the best interest of the company. In recent years there have been attempts to expand the duty of directors to a broader group of stakeholders (e.g. employees and the communities in which they operator) but so far there have been no tangible legal results.
Currently Canadian public companies and their directors have no statutory liability for misrepresentations in the company’s continuous disclosure documents, unless they are incorporated by reference in the prospectus or other offering document. However, plans to change this position re underway in Ontario.

Works Cited

McDermott, Robert. McMillan Binch LLP. “Corporate governance in Canada” Global Corporate Governance Guide 2004: best practice in the boardroom. Published by Globe White Page. Accessed 15 July.
last modified 11 June 2009. accessed 15 July 2009

(sorry for the poor formatting, it looks better as a word document)

Carolynna Gabriel

Offline ChristianFalk

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Re: Homework
« Reply #10 on: July 17, 2009, 12:13:36 am »
Find solution (Corporate Governance in Norway) attached

Best regards

Offline Michal Wilczek

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Re: Homework
« Reply #11 on: July 17, 2009, 12:35:52 pm »
Please find my homework attached:

- Corporate Governance in Poland
- The Corporate Governance Code for Polish Listed Companies (The Gdańsk Code)

Best regards,

Michal Wilczek

Offline florian totzauer

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Re: Report
« Reply #12 on: July 17, 2009, 01:20:16 pm »
HW 8: New Zealand Corporate Governance

Historical Background
Historically, the corporate governance system in New Zealand has been closely tied to the British system. In the second half of the 20th century, it started to slowly depart from the British system and became more affected by American influences. Nevertheless, by 1986 people felt the need for more extensive reforms of their governance system. Eventually, the Companies Act was established in 1993. In summary, close contacts and relationships are emphasized and public investors welcomed under this system. It further prescribes that directors, in order to get appointed, have to acquire a fixed amount of shares in the company. Further objectives of the reforms were better disclosure of directors’ outside interests and corporate performance (Wei 2003: 169). For listed companies, the New Zealand Stock Exchange (NZSE) also requires a disclosure stating corporate governance policies, practices and processes in their annual reports.

A More Precise Look at the Companies Act
First of all, one has to highlight that the corporate governance system is composed of statute, code and common law principles. “The Companies Act 1993 provides the fundamental corporate governance framework for companies, codifying and expanding directors’ duties and shareholders’ rights under the common law” (Gilbertson and Brown 2002). In addition, the Institute of Directors in New Zealand has issued a Code of Proper Practice for Directors and a series of best practice statements, which contain guidelines for corporate governance structures. However, these primarily refer to moral and ethical responsibilities instead of binding laws. Nevertheless, the responsibility for abiding by some of the recommendations is attributed to a large extent to the directors who are accountable to the shareholders.

The Role of Directors
The Act states that the management of the company is the responsibility of the company’s board while the shareholders retain the ultimate control. Directors have to ensure compliance with the Companies Act and the company’s constitution at all times. They are expected to act in good faith and in the best interests of the company. Under the Code of Proper Practice certain recommendations are made for directors’ responsibilities: ensure the company’s goals are established and achieved, establish policies for strengthening the company’s performance, monitor performance of management, appoint the CEO and fix the terms of employment, ensure the company adheres to high standards of ethics and corporate behaviour, and ensure the company has in place appropriate risk management and compliance policies.

According to the Act, the board can delegate powers to management or individual committees (e.g. remuneration or audit committee). However, it is not allowed to delegate specific functions like their managMment function itself. Further limitations with regard to the delegation of powers exist, for instance the issuance or transfer shares cannot be delegated.

The NZSE proposes the minimum number of directors should be two or one third of the total number of board members (whichever is greater). A listed company must have at least three directors. Two have to be New Zealand residents. Under the Code of Proper Practice it is recommended that the chairman and the majority of directors should be non-executive. Typically, such a non-executive director is not a recent employee but an independent person so that he can freely act in the best interests of the company and its shareholders. Although not legally required, a separation of board chairman and CEO is promoted in the Code. Similarly, there are no obligations regarding the number of annual board meetings.

The Role of Shareholders
As mentioned earlier, shareholders retain the ultimate control, i.e. they can make proposals and have a right to vote on all issues discussed at the annual or special meetings. Further powers attributed to shareholders are: appointing the director, adopting or altering the constitution of the company, appointing and removing the auditor, approving any transaction involving the acquisition or disposition of assets (more than half the value of the company’s total assets), and liquidating the company. For listed companies, there are some extensions of shareholder power, for example approving directors’ remuneration. In case the directors fail in complying with their duties, the company and shareholders have the right to take action.

Gilbertson, B. and Brown, A. (2002) Corporate Governance in New Zealand. Retrieved July 17 2009 from:

Wei, Y. (2003). Comparative Corporate Governance: A Chinese Perspective. Kluwer Law International

Kind regards, Florian Totzauer
« Last Edit: July 17, 2009, 02:36:36 pm by Ted Azarmi »


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Re: Corporate Governance Reports
« Reply #13 on: July 17, 2009, 03:37:07 pm »
Please find my homework attached.

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Re: Corporate Governance Reports
« Reply #14 on: July 17, 2009, 06:04:14 pm »
Please find my homework attached
Have a nice weekend
Julia Kessler