ABSTRACT
ALTHOUGH MUCH HAS BEEN PUBLISHED ON corporate governance in recentyears, the predominant paradigm is a US one. Yet the European context is highly significant in both its differences and similarities to the US experience. Continental Europe is characterised by a governance system in which large block shareholders play a key role, whereas the US system is driven by the needs of dispersed shareholders articulated through the stock market.The UK, however, shares much similarities with the US system although it has its own idiosyncratic features and institutional characteristics.There has been much debate over the relative merits of the block holder-dominated and stock market-dominated systems in promoting economic efficiency and growth, but this remain an inconclusive debate.There is also a trend towards greater convergence of some, or all, aspects of corporate governance driven in part by the forces of globalisation of product and capital markets but also inspired by political visions of greater harmonisation within Europe and between Europe and the rest of the world. Thus corporate governance, far from being monochromatic, presents a rich variety of laws, practices and institutional structures. An understanding of this variety is a necessary precondition to understanding how corporate governance is likely to evolve in the future and affect the functioning of companies and capital markets, as well as influence the practice of corporate finance.
