Corporate Governance: A Critical Comparison among International Theories, Codes of Best Practices, and Empirical Research

Abstract

As strong role played by the financial g lobalized market, several countries have adopted rules and principles (best practice codes) to be shared among all co mpanies, in order to provide tools to solve governance problems, regulate relations among managers and shareholders. This paper seeks to investigate American, English, German, Japanese and Italian codes of conduct. Literature agrees that corporate governance archetypes are those Anglo-Saxon and German -Japanese; on the other hand the Italian model represents an interesting case study. These three models are based on different international theories (Agency, Stakeholder, Resource Dependence, and Stewardship). Scholars maintain that the Agency theory is the most valid of the theories, with respect to the existence of international convergence processes. Thus, the objective of the paper is twofold. First of all, we want to understand which international theory has been adopted by Anglo-Saxon, German-Japanese, and Italian codes. Secondly, we wish to verify whether empirical research confirms principle efficacy contained in codes of corporate governance. From a co mparat ive study among international theories and rules it would emerge that variables contained in the codes would be better explained and regulated under Agency approach. It should be noted, however, that each country - in spite of the convergence processes towards a single standard of rules - is affected by their social, and economic background. Finally, we could argue that empirical studies do not often explain critical success factors in the same way of codes although both are the result of best practices.