The implementation of good corporate governance by institutional investors: The Scorecard for German Corporate Governance

Throughout Europe corporate governance codes are increasing in importance. These codes are developed to enhance the quality of corporate governance. Institutional investors are the major trigger in penalising companies' lack of compliance with a code. The mechanisms of institutional investors t...

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Bibliographic Details
Published in:International journal of disclosure and governance 2005-09, Vol.2 (3), p.244-263
Main Author: Bassen, Alexander
Format: Article
Language:English
Subjects:
Adaptation
Boards of directors
Capital markets
Codes
Compliance
Corporate governance
Costs
Disclosure
Initiatives
Institutional investments
Investors
Principles
Shareholders rights
Stockholders
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Summary:Throughout Europe corporate governance codes are increasing in importance. These codes are developed to enhance the quality of corporate governance. Institutional investors are the major trigger in penalising companies' lack of compliance with a code. The mechanisms of institutional investors to penalise companies are analysed and empirical results for Germany are presented. To reduce the cost of these mechanisms, the Scorecard for German Corporate Governance (CG Scorecard) will be examined as an instrument for institutional investors. Empirical findings regarding compliance with the CG Scorecard show that there are particular deficits in terms of corporate governance commitment and remuneration of board members. [PUBLICATION ABSTRACT]
ISSN:1741-3591
1746-6539
DOI:10.1057/palgrave.jdg.2040056