Corporate governance and business ethics in the European Union: a cluster analysis

Abstract

Purpose – The purpose of this paper is to examine the underlying differences in European Union (EU) country approaches to corporate governance and business ethics given the conformity imposed by the EU's recent standardization directives.Design/methodology/approach – The authors conducted a multivariate statistical analysis, involving a two‐stage procedure where hierarchical and non‐hierarchical methods are used in tandem, using data from the 27 EU countries and 38 factors from the economic freedom of the world (EFW) index. This method is suitable for structured statistical data and allows for identification of groups that share similar characteristics – in this case among 38 criteria.Findings – Despite the call for standardization by the EU's Transparency Directive, countries within the EU are adapting their governance and ethics practices, according to their own technical, cultural, and political process, creating unintended changes to the directive, especially in the implementation phase. The paper fin...