Corporate Governance in Europe

Abstract

Corporate governance in Europe is an interesting and timely subject for this Symposium because European corporate governance is where American corporate governance was five to seven years ago.There are several reasons why the European corporate governance movement has been slower to develop than it did in the United States.Europe, as a continent, is still a number of sovereign countries, has a variety of languages, and a significant number of different corporate laws.'The shareholder structure is different from that of the United States. 2 Corporate shareholder structures in Europe consist of holding companies, government holdings, wealthy families but a relatively small institutional shareholder base. 3 In reaction, the American institutions are trying to implement the governance system that has been so successful here, but they recognize that there is still a long way to go. II. NEEDED CHANGFs IN SHAREHOLDER STRUCTUREI think European shareholder structure is the most resistant to change.A holding company holding five to eighteen percent of a corporation can exercise control of a corporation because of the non-activism of the other shareholders.Institutional shareholders are changing, but they still continue to use the Wall Street rule -"If I do not like the company, I walk"-rather than voice their opposition.Although they

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