FOREWORD Scholars who contributed to this book have a common idea that a response to the corporate scandals of the 1990s and 2000s has been strengthened by Boards of Directors and regulators to protect shareholders from the actions of...
moreFOREWORD
Scholars who contributed to this book have a common idea that a response to the corporate scandals of the 1990s and 2000s has been strengthened by Boards of Directors and regulators to protect shareholders from the actions of unethical managers. In this context, a statement introduced by scholars in the 20-th
century about a need to overcome the agency problem has been supported by contributors of this book from the point of view of its international context and contributed to the previous research by Chapelle (2004), Davidson and Rowe (2004), López-Iturriaga and Hoffmann (2005), Carvalhal da Silva and Leal (2006).
The book addresses a thought that behavior of top management should be directed further by increased oversight of Boards of Directors and increased regulations by the state. In this way, we see that corporate governance, on the
edge of the third decade of the 21-st century, turned to the very complex term.
This term requires respect to be directed toward both internal and external mechanisms of corporate governance reinforced by the regulation by the state.
This idea has been considered in part in the papers by Colli (2009), Tomasic and
Fu (2006), Mohr and Wagner (2013), Kostyuk and Barros (2018).The authors of the book observed a significant increase in the financial
assets under management by large institutional investors. This concerns both developed and developing countries and becomes a worldwide trend in corporate governance which should be taken into account by the state as regulator of
corporate governance as mentioned in the previous papers by Rogers, Dami, de
Sousa Ribeiro, and de Sousa (2008), and Wang, Barrese, and Pooser (2019). We share the point of view of the authors of this book and also believe these large institutional investors can have a significant impact on the governance,
decision-making, and performance of companies throughout the world. At the same time, the role of institutional shareholders still has a national
specific (Thiele, Busse, & Prigge, 2018; Akhtaruddin & Rouf, 2012; Rizzato, Busso, Devalle, & Zerbetto, 2018; Kasraoui & Kalai, 2018). Thus, the authors stated that although in an institutional context favorable to the role of major
institutional investors, it is evident that this category of shareholders did not play a significant role in Italian listed companies. One of such specifics explaining the low weight of institutional shareholding is due to the substantial
role of minority shareholders, which entails considerable limitations both in the
exercise of the right of voice and in the impossibility of exercising an exit
strategy quickly and cheaply. Therefore, the ownership structure becomes a complex term with regard to its national specifics, customs and regulation introduced by the state.
Historical roots and cross-cultural links are still important in outlining the profile of corporate ownership and control (Apostolov, 2011; Behrmann Ceschinski, & Scholand, 2018; Chidiac El Hajj, 2018; Di Giacomo & Cenci,
2018). Thus, the authors declare that Spain still shares most of the characteristics of Latin corporate governance systems such as high ownership concentration, the high weight of banks in the financial structure and
governance of the firm, weak progress in institutional investments, etc. To
become more original in corporate governance, listed companies in Spain need to
comply with the recommendations of the Unified Code of Good Governance in terms of increased transparency, board independence, accountability, diversity, performance-related remuneration and, in general, more effective boards, but
actually there is still a significant percentage of companies which do not follow all the guidelines of the Code. Corporate control mechanism called “pyramids” is still used worldwide
although a lot of critics has been addressed toward pyramids since the time of
Bearle and Means (Mindzak & Zeng, 2018; Bany‐Ariffin, 2010; Bany, Fauzias, & Siong, 2007; Lim, 2001). Studying corporate ownership and control in Turkey, scholars concluded that corporate control is highly concentrated in Turkey using pyramids as a vehicle to diverge cash flow rights from control rights. Probably, this can be explained by the national specifics of corporate
ownership and control (Sikandar & Mahmood, 2018; Ulrich, 2018). Thus, the authors concluded that 53% of the listed non-financial Turkish corporations are controlled by families and 29% of corporations are functioning as conglomerate
affiliates. Since most of the conglomerates are also governed by families, family ownership is one of the dominating characteristics, and this could provide a fruitful soil for further active development of pyramidal corporate control.
We expect that the readers of this book will find interesting to know the particular practices in corporate ownership and control in New Zealand called the authors as “Maori economy”. Corporate governance and ownership in New Zealand has emerged from the nexus between listed companies, the state-owned sector, an abundance of large cooperatives, many QPs and an array of closely held firms of substance. This is a solid complex of national species of corporate ownership and control mixed with the strong historical roots and customs.
Experience of China is absolutely important to get inside of recent and further dynamics of corporate ownership and control in Asia at least. Legal protection of shareholders is still weak in China and this is a serious issue for further development of corporate governance. In this context, we can agree with the statement of the authors that there is a need to enforce a better stock market through having strong and independent legal regulations to control
stock market and to ensure minority shareholder rights.
Thanks to the contributions of authors this book picked up several very important issues related to corporate governance. Is corporate ownership and control still nationally driven issue or not? What sort of corporate governance regulation is more effective – soft or strict? Does family ownership produce a new model for corporate ownership and control? Is corporate law able to account all those national peculiarities of corporate ownership and control on one side,
and respect the worldwide best practices in corporate governance on another
side? Authors of these books made their utmost to fix these issues as further research for scholars worldwide.
Prof. Alexander Kostyuk,
Virtus Global Center for Corporate Governance, Ukraine
Prof. Marco Tutino,
Roma Tre University, Italy
