The Anglo-Saxon versus the Continental European Corporate Governance Model: Empirical Evidence of Board Composition in Belgium
In this paper, two corporate governance models have been compared - the Anglo-Saxon and the Continental European models. These corporate governance models differ strongly, and the differences are mainly due to differences in the business context. The problems arising from separation of ownership from control will thus have to be solved through different mechanisms. One important mechanism is the board of directors. The board composition of 122 companies has been analyzed in a Belgian empirical study. From the tests, we found a significant positive relationship between the number of directors in the board and a range of other factors: the size of the company; its nationality; whether the company is listed or not; and the sector in which the company is operating. Only shareholder structure has no effect on the size of the board. The second variable affecting the composition of the board is the percentage of external directors. We found that the number of external directors differs significantly between companies with a different nationality and between companies that are listed or not. The size, the shareholder structure and the sector were not related to the percentage of external directors in a company. Keywords: corporate governance, board composition
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