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We analyze corporate governance mechanisms in Canadian and US firms. We show that despite similarities in governance practices in both countries, there are differences in the efficacy of these mechanisms. In particular, the performance of Canadian firms is less sensitive to ownership structure than that of US firms. Differences are also found in the performance implications of incentive pay. Our study suggests that country-specific governance trends persist among Canadian firms cross-listed in the United States. These findings may explain why Canadian firms which are cross-listed in the United States continue to trade at a discount compared to their US counterparts.

Effective mechanisms for corporate governance are essential for market-based economic systems. This chapter addresses the necessity of corporate governance research to address the competing goals of various stakeholders in the firm: managers, suppliers of financial capital, and other stakeholders. The review of literature reveals that firm-level complexity, as well as diversity of national business systems, are important for understanding corporate governance practices and regulations around the world.

This paper examines the evolution of debt and equity ties among keiretsu firms between the early 1990s and the later part of the decade. During this time frame, the stable shareholding relations characteristic of the Japanese inter-corporate network faced significant pressures from the opening of the Japanese equity market and globalization of financial markets. We investigate whether the traditional “stakeholder model” of the Japanese firm is threatened by North American “shareholder” models. Using multiple measures of keiretsu ties, our analysis suggests this is not the case. Overall, we provide evidence of strengthening ties, although in the case of equity, there has been an evolution away from institutional investors.

This study investigates the impact of corporate governance mechanisms on performance related turnover. Our results indicate that smaller boards and institutional block holders are positively related to the likelihood of performance related turnover. CEOs that also hold the position of the chairman of the board or belong to a founding family face lower likelihood of turnover. CEO stock ownership is negatively related to turnover and CEOs who own 3 percent or more of their company stock face a significantly lower likelihood of performance related turnover. Moreover, protection from external control market has no effect either on the likelihood of turnover.

Efforts to create an international system for corporate responsibility should now be concentrated not on the drafting of yet more rules and standards, but on the strengthening of existing international institutions. This chapter first outlines the problems with using rules that are generally not enforceable within national courts to make global corporations accountable. It is argued that at least some of these obstacles could be overcome by strengthening already existing international institutions. Four such institutions are examined – the existing regional human rights bodies, the International Criminal Court, the International Labor Organization (ILO), and an expanded International Court of Justice.

This chapter reports the progress of corporate governance reforms in nine East Asian economies as disclosed through two independent studies. The first study is a stock-taking exercise to take note of on-going reforms in corporate governance rules and regulations through a scorecard on corporate governance conducted by experts among the regional economies. The second study covers perceptions of the implementation and enforcement of corporate governance rules as seen by fund managers and analysts. The two studies yield different results, indicating a divergence between the regulatory environment and market perceptions of corporate governance practices in the nine economies.