EUROPEAN CORPORATE GOVERNANCE SYSTEMS: A SURVEY OF LITERATURE

¹Tony Ikechukwu Nwanji, ²Kerry E. Howell, ³Dominic Z. Agba, ⁴Adedoyin Isola Lawal, ⁵Frank D. Awonusi, ⁶Adegbola Olubukola Otekunrin, ⁷Sunday O. Adewara, ⁸Eluyela Damilola Felix & ⁹Adabanjo Falay E.

^1,4,5,6,8,9Department of Accounting and Finance Landmark University, Nigeria

^3,7Department of Economics, Landmark University Nigeria

²Graduate School of Management, Plymouth University, United Kingdom

Email: nwanji.tony@lmu.edu.ng

ABSTRACT

This paper examined the corporate governance systems of selected European countries, based on the German’s stakeholder model to see if it offers shareholders better deal particularly after the Enron and WorldCom affairs in 2001 and the Global banking and financial meltdown of 2009-2011. The Anglo-American system of corporate governance is based on profit maximisation which claims to protect the interests of shareholders who are the owners of the corporation through share ownership. Whereas, the German model which is seen as the stakeholder’s system considers that corporations are run for the benefits of its stakeholders who contribute to the achievements of the corporation. There are persuasive arguments for and against each model. An assessment of the corporate governance systems of four European countries found that there is no “one-size-fits-all” regarding corporate governance practices of these countries. As each country’s corporate governance system is underpinned by some factors relevant to that country such as law, regulation, types of business organisations and ownership structures.  The study further shows that the increased globalisation of business has so far not resulted in global corporate governance systems. If corporate governance regulation is to comb or limit unethical practices of some of the global businesses, then there is a good argument for global corporate governance system