Corporate Governance Code Enforcement
Keywords:
market supervisors,, business law, corporate governance norms,, enforcement, and the legal system.Abstract
A number of European nations have developed corporate governance codes. While some are
based on the law, the majority are self-regulatory. The codes' rules are applicable in both
situations on a "comply and explain" basis. Market mechanisms, such as shareholders using
their legal and factual rights inside the corporation, are the primary means of enforcement.
Furthermore, these regulations are often absorbed into the legal system via blank norms like
contract or liability laws. Further concerns come up in jurisdictions like Germany and the
Netherlands where the code has been specifically included in the legislation. In these nations,
the function of auditors and market supervisors has been specifically examined. The
investigation comes to the conclusion that the optimal balance for creating flexible but still
successful corporate governance procedures is market-led enforcement combined with a
strengthening of company law processes.
