«Экономика и менеджмент – 2013: перспективы интеграции и инновационного развития». >> Том 2

Vlasenko Marina

Oles Honchar Dnipropetrovsk National University, Ukraine


One of the peculiar characteristics of the continental European model is the traditional attitude to the company not only as the exclusive property of the shareholders but also as to a social institution responsible to all stakeholders. Concentrated ownership structure «binds» the company to a strategic owner interested in its long-term development. This model has traditionally been dominated by «friendly» takeovers, «unfriendly» ones have been rejected and condemned by society and business. Therefore, the operation of raiders here are much less common than in the U. S.

The degree of ownership concentration in the countries, which repsent the archetypes of the models, differs significantly. According to Tab. 1 we can see that pyramidal control schemes do not exist in Anglo-Saxon firms, while in the rest of Europe this tool is very popular.

Table 1. The ownership concentration of in the 20 largest firms that

are listed in the European countries, by the end of 2008, in %


Widely held

Family control

Pyramid control

Median largest voting block
















The U.K.





Source: [1].

In European countries many corporate governance reforms aimed at strengthening the protection of shareholders rights were conducted over the past two decades [2]:

– Empowering the minority shareholders rights (the introduction of new rules: «one share – one vote» and control upon operations);

– Strengthening the internal controls (in order to improve the effectiveness of company directors’ activity, for example, introduction of the requirement for board members to disclose any interest in the transaction, direct or indirect);

– Improving disclosure requirements (introduction (or update) of the Code of Corporate Governance, the introduction of more strict rules for their own benefit and compensation, as well as financial reporting and auditing);

– Strengthening public enforcement (giving more powers to the supervisory authority, introducing sanctions against market abuse, enforcement of audit reports on financial activities).

Significant changes in the reform of corporate governance were made in 1999 with the introduction of OECD Principles of Corporate Governance at the European level and the adoption of national Codes of Corporate Conduct in the Member States (United Kingdom 1998, Italy 1999, Sweden 2001, Germany 2002, France 2003, the Netherlands 2003).

Actually, the matter is in the partial adoption and implementation of corporate standards of Anglo-American model of corporate governance, but in the academic literature is often debated that such convergence is nominal and in fact constrained by national governments. One reason lies in the harmful effects of unification offered, as all international codes should recognize national differences [3]. Attempts to transplant institutions (to imitate the import of institutions) associated with political and ideological considerations are implementing the principle of «one size fits all», which cannot be accepted. However, principles such as responsibility, accountability, legitimacy and transparency are universal standards of corporate governance [4].

Significant obstacles to real borrowing of the U. S. approach in European countries are [5, p. 70]: 1) focus on the rising cost of equity (the company’s activity for the only benefit of shareholders) in the EU is constrained by the dominant principle of «corporate social responsibility»; 2) the relative dominance of long-term strategies and motivations in the activity of European companies also causes the cautious attitude of the «dictatorship of the shareholders», which may require maximum efficiency in the short term for the benefit of the growth in market value; 3) high level of transparency in the corporation, which is typical for the model of «equity capitalism», is not typical for the principles of European business culture; 4) the existing doubts about the sustainability of the «new economy» and some European analysts’ consideration of high level of stock market development in the U.S. as temporary factors. Anyway, the changes have been happening and time will show to which extent the models of corporate governance tend to convergence.

The list of references:

1. Chirlesan D. Dynamics of corporate governance reform in Europe / D. Chirlesan, B. Ilut // Analele Stiintifice ale Universitatii «Alexandru Ioan Cuza» din Iasi – Stiinte Economice. – 2010. – Vol. 57. – P. 117–128.

2. Ivaschenko I. Corporate governance reforms in the EU: do they matter and how? / I. Ivaschenko, P. Koeva Brooks // IMF Working Paper. – 2008. – № WP/08/91 (April).

3. Berglöf E. The changing corporate governance paradigm: implications for transition and developing countries / E. Berglöf, E.-L. von Thadden // Conference paper, Annual World Bank conference on development economics, Washington D.C. – 1999 (June).

4. Fremond O. The state of corporate governance: experience from country assessments / O. Fremond, M. Capaul // World Bank policy research working paper. – 2002. – № 2858 (June).

5. Юданов Ю. Европейские корпорации в условиях глобализации. – М.: Мировая экономика и международные отношения. – 2001. – № 11. – С. 66–74.