An Economic Analysis of ‘Comply or Explain Principle’ under a Review Panel Regime

Yuri Biondi

Accounting, Economics, and Law: A Convivium, 2015, vol. 5, issue 3, 295-300

Abstract: This note comments on the Sergakis (2015)’s proposal to amend the ‘comply and explain principle’ concerning corporate governance disclosure through the introduction of a review panel in charge to supervise the disclosure process. Our preliminary economic analysis focuses on the review task that is foreshadowed for this panel that may be established at the macro- or the micro-level. Accordingly, we conclude that the Panel composition, including representatives for stakeholders inside and outside the firms, is critical to discover and obtain disclosure of sensitive information. In fact, although supervised by a review panel, the ‘comply or explain’ mechanism appears still quite unable to obtain disclosure of information that threatens the majority of vested interests represented in the panel.

Keywords: comply or explain; disclosure; corporate governance; financial regulation (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1515/ael-2014-0025

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Accounting, Economics, and Law: A Convivium is currently edited by Reuven S. Avi-Yonah, Yuri Biondi and Shyam Sunder

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