Convergence in Corporate Governance

Abstract

This chapter assesses convergence in the map of European corporate governance, addressing the deficit of empirical evidence on the patterns of corporate change. To meet this objective, it uses proprietary data on the corporate governance ratings of nearly 300 of the largest European companies between 2000 and 2004. The data offers an insight into the structure of corporate governance, with its building blocks comprising shareholders' rights and duties, takeover defences, disclosure, as well as board structure and functioning. The analytical steps undertaken to measure convergence in ratings focuses on the state of corporate governance in 2004 and its change between 2000 and 2004 across countries, groups of countries, and industries. From this analysis, it is observed that there has been convergence in European corporate governance. Between 2000 and 2004, almost all sample companies improved their ratings even if the rate of change has been uneven both across countries and across the building blocks of corporate governance.