“Corporate Governance Reforms in Continental Europe”

The fundamental problem of corporate governance in the United States is to alleviate the conflict of interest between dispersed small shareowners and powerful controlling managers. Classic works like Berle and Means (1932) and Jensen and Meckling (1976) discussed this separation of ownership and control and its consequences. Although some companies in the United States are controlled by large blockholdersfor instance, Microsoft, Ford, and Wal-Mart-such firms are relatively few and have thus drawn less attention in the corporate governance debate (Anderson and Reeb, 2003).