Journal of Law, Finance, and Accounting > Vol 3 > Issue 1

Corporate Governance and Ownership: Evidence from a Non-Mandatory Regulation

Sridhar Arcot, ESSEC Business School, France, , Valentina Bruno, American University,, USA,
Suggested Citation
Sridhar Arcot and Valentina Bruno (2018), "Corporate Governance and Ownership: Evidence from a Non-Mandatory Regulation", Journal of Law, Finance, and Accounting: Vol. 3: No. 1, pp 59-84.

Publication Date: 31 May 2018
© 2018 S. Arcot and V. Bruno
Corporate finance
JEL Codes: G32, G34, G38, K22


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In this article:
1. Introduction 
2. Sample and Data 
3. Corporate Governance and Dominant Shareholders 
4. Corporate Governance and Market Valuation 
5. Summary and Discussion 
A. The Combined Code provisions 


We study the governance choices of firms in a voluntary regulatory regime. We find that firms with a dominant shareholder are more likely to deviate from standards of best practice in corporate governance. However, lesser governance standards in firms where a dominant shareholder is present are not associated with lower performance. Our results suggest that standard governance practices that mostly empower the board of directors with a monitoring role are less relevant when the large shareholder is the monitor in place. Overall, we argue that the corporate governance of firms is the result of complex interdependences that go beyond a one-size-fits-all model.