Christine A. Mallin has edited an updated version of her 2006 book by the same title. Contributors are all well respected authorities and include: C.L. Ahmadjian, M. Ararat, L. Cabeza-García, M.J. Conyon, S.B. Dahiya, S. Gaia, J. Gillies, P.-Y. Gomez, S. Gómez-Ansón, M. Huse, R.P.C. Leal, C.A. Mallin, L. McGregor, A. Melis, O. Melitonyan, A. Okumura, J.L. Rasmussen, N. Rathee, M. Rizal Salim, A. Settles, G. Stapledon, T. Talaulicar, O.K. Tam, P. Tamowicz, Á. Telegdy, D. Weir, A.v. Werder, C.P. Yu. Countries covered include Australia, Brazil, China, Germany, Hungary, India, Italy, Japan, Malaysia, Norway, Poland, Russia, South Africa, Spain, Turkey and the UK.
The cover review by Robert Monks is glowing:
Throughout the world there is conflict between the desire to reap wealth from strong corporate functioning and the imperative of preserving the integrity of the sovereign state. Christine Mallin has assembled a collection of delightful essays describing the current circumstances of corporate governance in a variety of different countries. The volume reads like a story, fascinating, accessible and informative. The book can be read for information in each article or as a totality giving insight into the critical balancing of interests required in particular countries. Anyone buying this book – and you should – will have a fine experience.
Readers will see a pattern of convergence around transparency and protection of minority shareowner rights, as well as several additional elements. A continuing concern expressed by many in developing markets is the gap between on paper requirements and on the ground actions. Each chapter is devoted to a separate country. Some, like Mallin’s on the UK, provide a quick guide, focusing on codes and influential reports shaping both company governance and the evolving roles and responsibilities of institutional shareowners.
Other chapters focus on one or two more specific developments. For example, the chapter on Norway by Rasmussen and Huse provides an excellent overview of the rules, major companies, market, key players and governance structures, including their unusual system of a small proportion of employee-elected board members. Then the chapter goes into much more depth discussing the recent initiatives to require that women occupy 40 of the board seats at public limited companies.
Reports concerning the results of this experiment show mixed results thus far. The author suggest there may be more differences among women and among men than between men and women in general, so further research is needed. I’ve heard, at least anecdotally, the requirement has generally strengthened the quality of candidates newly brought to boards from both sexes. Let’s hope the third edition brings more solid evidence of the impact.
The chapter on the US was even more focused on executive pay and compensation committees. Unexpectedly, Conyon’s survey of the literature finds CEO pay higher where there is a compensation committee, rather than where there is not. Second, compensation isn’t significantly higher with insiders rather than outsiders. However, analysis didn’t appear to look closely at stock options, the most important recent variable in pay.
While many of us have been pinning our hopes on Brazil’s Novo Mercado, which requires higher corporate governance standards, and a multi-tier structuring of governance requirements, Leal warns that many problems remain. The visible effects of the initiatives are remarkable… new self-regulating ideas are brought about constantly, but many boards are still dominated by controlling shareowners. Director and shareowner engagement needs to improve to reach potential.
The struggles are different in many countries. Transition from state-ownership, family-dominated companies, the role of employees, and attempts to address corruption are common themes in many of the countries surveyed. The book certainly provides an excellent overview and will whet the readers appetite to explore further by country, issues and authors.