Applying 'Comply-or-Explain': Conformance with Codes of Corporate Governance in the UK and Germany

Seidl, David and Sanderson, Paul and Roberts, John (2009) Applying 'Comply-or-Explain': Conformance with Codes of Corporate Governance in the UK and Germany. Working Paper. UNSPECIFIED.

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The comply-or-explain principle is a central element of most codes of corporate governance. Originally put forward by the Cadbury Committee in the UK as a practical means of establishing a code of corporate governance whilst avoiding an inflexible ‘one size fits all’ approach, it has since been incorporated into code regimes around the world. Despite its wide application very little is known about the ways in which managers apply the principle – in particular, how they make use of the option to ‘explain’ deviations. To address this we analysed the compliance statements and reports of 257 listed companies in the UK and Germany, producing some 708 records of deviations, which we used to generate our empirically derived taxonomy of forms of ‘explanation’. We find these varied forms of ‘explanation’ are based in part on different logics of argumentation. This leads to a broader use of the option to ‘explain’ than envisaged by the Cadbury Committee. In addition our country comparison shows significant divergence in compliance patterns in the UK and Germany which may be explained by differences in experience, culture and legal system

Item Type: Research Report or Working Paper (Working Paper)
Additional Information: Series: Centre for Business Research, University of Cambridge, Working Paper No.389.
Faculty: ARCHIVED Faculty of Health, Social Care & Education (until September 2018)
Depositing User: Repository Admin
Date Deposited: 05 Nov 2015 10:02
Last Modified: 09 Sep 2021 16:18

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