The Comply-or-explain approach for enforcing governance norms

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dc.contributor.author Sarkar, Subrata
dc.date.accessioned 2015-12-03T10:43:58Z
dc.date.available 2015-12-03T10:43:58Z
dc.date.issued 2015-08
dc.identifier.uri http://hdl.handle.net/2275/370
dc.description.abstract In recent years the comply-or-explain approach for enforcing corporate governance norms has gained ground in regulatory parlance. The comply-or-explain approach has the advantage of tailoring governance norms to specific characteristics of individual companies which is believed to lead to more efficient corporate governance outcomes compared to the “one size fits all” approach that is often argued to be inherent in the comply-or-else approach. Yet, the effectiveness of the comply-or-explain approach presupposes the existence of many institutional conditions like ownership and control structure of companies, responsibility and transparency of their financial operations, efficiency of stock markets, and ability and incentives of shareholders to assess corporate behavior, all of which could take a long time to evolve and could be challenging especially for emerging economies. This article critically examines the relative advantages of the comply-or-explain approach vis-à-vis the more traditional comply-or-else approach and identifies the specific institutional conditions which are required for its success in achieving effective governance of companies. en_US
dc.language.iso en en_US
dc.relation.ispartofseries WP;WP-2015-022
dc.subject Corporate governance en_US
dc.subject strategic behavior en_US
dc.subject governance norms en_US
dc.subject enforcement en_US
dc.subject convergence en_US
dc.title The Comply-or-explain approach for enforcing governance norms en_US
dc.type Working Paper en_US

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