Corporate governance – understood as the modes of organising ownership, control and management of a corporation - has been at the centre of discussion for many years. The significance of the subject can also be seen in changing legal frameworks, like the Sarbanes Oxley Act in the U.S., the new Commercial Code in Japan, and a number of Corporate Governance Codes in Europe. For multinational corporations (MNCs), corporate governance is important in even more dimensions. Firstly, there is a parent-subsidiary relationship in addition to the relationship of ownership and control that every firm is faced with. Secondly, MNCs are faced with different corporate governance systems in the home and in the host countries, which also influence the availability and effectiveness of corporate governance mechanisms.
This is the point our joint research deals with. We are interested in the question of to what extent subsidiaries of a MNC adopt the corporate governance mechanisms of their mother corporations (in the legal framework given), and the level of success they achieve. Our hypothesis is that successful corporations have stable corporate governance systems. There may even be a change in the orientation of the system (as can be seen in the case of Nissan after Renault’s involvement), but as long as there is a clear orientation, the system will function. What does not function, however, are hybrids, namely combinations of different systems and orientations.
Harald Dolles joined the DIJ in August 2001. His main areas of research are International HRM and the management of international co-operative ventures.
Andreas Moerke joined the DIJ in September 2001. His main research areas are Industrial Organization and Corporate Governance.
On the topic of "corporate governance in multinational corporations" a research report is available: DIJ Working Paper 04/03