Chapter 3: A new regulatory technique for global corporations
Corporate governance codes have flourished in the past 30 years. In addition to their proliferation, codes have been progressively formalized and integrated into legal systems. This integration has contributed to their legitimacy as a central feature of the regulatory environment of large companies in most jurisdictions worldwide. The codification’s progressive integration process, expressing a gradual acceptance of codes, will be first described, then the cause of this integration, i.e. the benefits attributed to soft law regulation of global corporations, will then be analysed.
The explosion in the number of corporate governance codes and their worldwide diffusion has been impressive as noted by several authors (Cicon and Ferris 2008; Cicon et al. 2012; Aguilera and Cuervo-Cazurra 2009; AMF 2016). By 2008, 64 countries had issued 196 distinct codes of good governance. In 2007, the European Corporate Governance Institute reported the existence of codes in 66 different countries, and in 100 for year 2016.1 Corporate governance codes are now part of the landscape of corporate governance systems throughout the world, attesting to the general acceptance of the instrument.
The very first corporate governance codes were issued in the United States in the 1970s, followed by Hong Kong and Ireland. The beginnings of the worldwide proliferation of corporate governance codes, however, dates back to the influential Cadbury Report launched in 1992 (Cadbury Committee 1992). Codes thereafter gained significant influence in a relatively short period of time. Following the UK Cadbury Report, many countries issued codes...
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