ABSTRACT
This chapter describes the background to current corporate governance regulation in Australia and internationally. The focus is on Australia because this is where the research presented in this book was conducted; however, developments elsewhere, particularly in the United Kingdom and United States, are included because they have had a strong influence worldwide. Although there are country-specific differences in corporate governance regulation, many of its core aims and objectives are common to all systems. The comply-or-explain mechanism explored by this book is used by the majority of codes of corporate governance across the globe. When the European Commission conducted a study of corporate governance codes in 2002, comply-or-explain was already used in Brazil, China, Indonesia, Korea, Malaysia and Mexico, as well as many Member States (FRC 2012, p. 25). Table 2.1 lists the 93 countries worldwide that have created a code of corporate governance of any sort at the time of writing (ECGI 2015). It shows that the large majority of countries first introduced a code in the early 2000s, although some of these codes began their life earlier as self-regulatory measures that were subsequently formalised into a code. Approximately 70 percent of those codes are based on the comply-or-explain mechanism, the remainder being split between purely voluntary guidelines and mandatory rules. This proliferation of the comply-or-explain mechanism means that the research described in this book, although based on the Australian code, will have much wider relevance.
