Institutions and Voluntary Compliance: The Disclosure of Individual Executive Pay in Germany

Amon Chizema

Corporate Governance: An International Review, 2008, vol. 16, issue 4, 359-374

Abstract: Manuscript Type: Empirical Research Question/Issue: This study seeks to understand why the disclosure of individual executive compensation, as recommended by the German Code of Corporate Governance, met with resistance in some firms while being a welcome innovation for others. Employing the theoretical perspective of institutional inertia and change, this paper identifies the characteristics of a firm likely to embrace or resist a management practice imported from an Anglo‐American system of corporate governance. Research Findings/Results: Using data on large German firms for the years 2002 through 2005, the study shows that institutional ownership, dispersed ownership, state ownership, prior adoption of shareholder value‐oriented practices, and firm size are positively and significantly associated with the disclosure of individual executive compensation. On the other hand, the size of the supervisory board and firm age are negatively and significantly associated with individual disclosure of executive compensation. Theoretical Implications: This study provides empirical support for the institutional inertia or change perspective at the national level for the adoption of contested management practices, taken from the Anglo‐American system and translated to the German model. As such, it adds to the argument on convergence/divergence in comparative corporate governance literature, as well as support for the neo‐institutional perspective in helping to further understand institutional change. Practical Implications: This study offers insights to policy makers who aim to create an institutional environment that accepts corporate governance practices translated or negotiated from a different variety of capitalism. In addition, it provides a useful synthesis of the relevance and effectiveness of codes of corporate governance, thus helping policy makers to recommend continuation with the current elements of the code or to make such provisions compulsory.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://doi.org/10.1111/j.1467-8683.2008.00689.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:corgov:v:16:y:2008:i:4:p:359-374

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=0964-8410&site=1

Access Statistics for this article

Corporate Governance: An International Review is currently edited by William Judge

More articles in Corporate Governance: An International Review from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().