Corporate Governance Codes

This chapter analyses the role of corporate governance codes (CGCs) in shaping the regulatory framework for listed companies, with specific regard to board organisation and duties. CGCs rely on soft law and self-regulation, which distinguish them from traditional company law measures. These regulatory strategies have comparative advantages and disadvantages, which this chapter explains in light of the main characteristics of CGCs and the matters they address. In more detail, the chapter explains how soft law (§5.01) and self-regulation (§5.02) work in CGCs. It also analyses the most typical provisions of CGCs and how these adjust to the needs of specific listed companies (§5.03). It then explains the role of the ‘comply or explain’ (CoE) principle in fostering better corporate governance practices (§5.04) and highlights the effect of formal and informal enforcement of CGC provisions (§5.05). Some reflections on the current state and the future of CGCs conclude the chapter (§5.06).