Abstract
This chapter concerns how the Swedish national corporate governance system is reformed by regulatory means. The regulation in focus is the implementation of nomination committees, an idea from the UK Cadbury Code, imported to Sweden as part of the Swedish Corporate Governance Code. The main objective is to understand the intersections between international best practice regulation and local practices on the one hand, and between actions by the regulator and those regulated on the other hand. The first intersection is captured by the use of the concepts of transplantation and convergence derived from the sciences of law and economics, and the second intersection is captured by the concept of translation from organizational theory. The main findings of the chapter concerning the Swedish nomination committee implementation are that the imported regulations result in local rather than in international convergence and that the impact of regulators in transplanting transnational rules is limited by translations made by those regulated.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
We will return to the label used in the Swedish code below. For now it is enough, however, to state that the formal Swedish translation used in the code is “nomination committee.”
- 2.
In this chapter corporate governance is defined according to Shleifer and Vishny (1997) as the national system of rules and norms safeguarding the investment of the suppliers of finance.
- 3.
In this chapter the introduction of the Swedish code is used as a demarcation of this debate, even though it has continued.
- 4.
For exceptions see Gillespie (2002) and Kanda and Milhaupt (2003).
- 5.
In the rare cases where the financial year is not identical with the calendar year the first half was used, i.e., for 1998 annual reports from 1997/1998 were used rather than from 1998/1999.
- 6.
Please note that a Swedish board is composed differently with regard to management in comparison with, for instance, Anglo-Saxon boards.
- 7.
Organization for small shareholders.
- 8.
In the Swedish cooperative and voluntary sectors the concept of election committee (valberedning) is a well-known method of dealing with board nomination issues in an attempt to avoid power concentration.
- 9.
The other being the AGM, the board, the managing director (CEO), and the auditor
- 10.
Note that industrivärden discussed above is the leading investment company in the Handelsbanken sphere.
- 11.
The common way of using both labels used to be having one in the heading and another in the running text. A possible explanation for this is that by this time the work of the Swedish code group (see above) was beginning to be known among the firms, and in the final corrections of the annual report mistakes occurred.
- 12.
Mandatory in the Swedish code regulation means in a “comply or explain” sense. However, the code has shown great normative influence and deviations have been very rare.
References
Agnblad, J., Berglöf, E. Högfeldt, P., & Svencar, H. (2001). Ownership and control in Sweden: Strong owners, weak minorities and social control. In F. Barca & M. Beht (Eds.), The control of corporate Europe (pp. 228–258). Oxford: Oxford University Press.
Aguilera, R. V., & Cuervo-Cazurra, A. (2004). Codes of good governance worldwide: What is the trigger? Organization Studies, 25(3), 415–443.
Bebchuck, L. A., & Roe, M. J. (2004). A Theory of path dependence in corporate governance and ownership. Columbia University School of Law, Working Paper no. 131.
Berkowitz, D., Pistor, K., & Richard, J. F. (2003). Economic development, legality, and the transplant effect. European Economic Review, 47, 165–195.
Buck, T., & Shahrim, A. (2005). Translation of corporate governance changes across national cultures: The case of Germany. Journal of International Business Studies, 36(1), 42–62.
Buck, T., Shahrim, A., & Winter, S. (2004). Executive stock options in Germany: The diffusion or translation of US-Style corporate governance? Journal of Management & Governance, 8(2), 173–186.
Carson, E. (2002). Factors associated with the development of board sub-committees. Corporate Governance: An International Review, 10(1), 4–18.
Clarke, T. (2004). Cycles of Crisis and Regulation: the enduring agency and stewardship problems of corporate governance. Corporate Governance: An International Review, 12(2), 153–162.
Coffee, J. C. (2001). The rise of dispersed ownership: The roles of law and the state in the separation of ownership and control. The Yale Law Journal, 111(1), 1–82.
Collin, S.-O.(1990). Aktiebolagets kontroll: ett transaktionskostnadsteoretiskt inlägg i debatten om ägande och kontroll av aktiebolag och storföretag. [The control of the corporation: a transaction-cost based contribution to the debate of corporation control] Lund: Lund University Press.
Czarniawska, B., & Jorges, B. (1996). Travels of ideas. In B. Czarniawska & G. Sevón (Eds.), Translating organizational change. Berlin and New York: Walter de Gruyter.
Czarniawska, B., & Sevón, G. (2005). Global ideas. How ideas, objects and practices travel in the global economy. Malmö: Liber and CBS Business Press.
DiMaggio, P. J. (1988). Interest and agency in institutional theory. In L. G. Zucker (Ed.), Institutional patterns and organizations (pp. 3–32). Cambridge, MA: Ballinger.
Djankov, S., Glaeser, E., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2003). The new comparative economics. Journal of Comparative Economics, 31, 595–619.
Fristedt, D., & Sundqvist, S.-I. (1998). Owners and power in Swedens listed companies. Halmstad: SIS garservice AB.
Fristedt, D., & Sundqvist, S.-I. (2000). Owners and power in Swedens listed companies. Halmstad: SIS garservice AB.
Fristedt, D., & Sundqvist, S.-I. (2002). Owners and power in Swedens listed companies. Halmstad: SIS garservice AB.
Fristedt, D., & Sundqvist, S.-I. (2004). Owners and power in Swedens listed companies. Halmstad: SIS garservice AB.
Gillespie, J. (2002). Transplanted company law: An ideological and cultural analysis of market-entry in Vietnam. International and Comparative Law Quarterly, 51, 641–672.
Gilson, R. (2004). Globalizing corporate governance: Convergence of form or function. In J. N. Gordon & M. J. Roe (Eds.), Convergence and persistence in corporate governance. Cambridge, MA: Cambridge University Press.
Gordon, J. N., & Roe, M. J. (2004). Introduction. In J. N. Gordon & M. J. Roe (Eds.), Convergence and persistence in corporate governance. Cambridge, MA: Cambridge University Press.
Hansmann, H., & Kraakman, R. (2004). The end of history for corporate law. In J. N. Gordon & M. J. Roe (Eds.), Convergence and persistence in corporate governance. Cambridge, MA: Cambridge University Press.
Högfelt, P. (2004). The history and politics of corporate ownership in Sweden, ECGI working paper.
Henreksen, M., & Jacobsson, U. (2003). The Swedish model of corporate ownership and control in transition, IUI working papers serie on 593.
Jonnergård, K., & Kärreman, M. (2004). Board Activities and the Denationalization of Ownership – The Case of Sweden. Journal of Management & Governance, 8(3), 229–254.
Jonnergård, K., & Larsson, U. (2007). Developing codes of conduct: regulatory conversations as means for detecting institutional change. Law & Policy, 29(4), 460–492.
Kahn-Freund, O. (1974). On uses and misuses of comparative law. The Modern Law Review, 37, 1–27.
Kanda, H., & Milhaupt, C. (2003). Re-examining legal transplants: The Director’s Fiduciary duty in Japanese corporate law. Columbia University Law School, Working paper no 219.
Kristiansson, B. (1998). Svenska ägarpolicies första upplagan. [Swedish ownership policies, 1st ed.] Stockholm: Företagsjuridik Nord & Co.
Kristiansson, B. (2003). Svenska ägarpolicies, andra upplagan. [Swedish ownership policies, 2nd ed.] Stockholm: Företagsjuridik Nord & Co.
La Porta, R., Lopez-De-Silanes, F., & Sheifer, A. (1999). Corporate ownership around the world. Journal of Finance, LIV(2), 471–517.
La Porta, R., Lopez-De-Silanes, F., Sheifer, A., & Vishny, R. (2000). Investor protection and corporate governance. Journal of Financial Economics, 58, 3–27.
Latour, B. (1986). The Powers of Association. In J. Law (Ed.) Power, action and belief: A new sociology of knowledge? London: Routledge.
Legrand, P. (1986). The impossibility of “Legal transplants”. Maastricht Journal of European and Comparative Law, 4, 111–124.
Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: formal structure as myth and ceremony. American Journal of Sociology, 83(2), 340–363.
Oxelheim, L. & Randoy, T., (2003). The impact of foreign membership on firm value. Journal of Banking & Finance, 27, 2369–2392.
Roe, M. J. (2002). Corporate Law’s Limits. Journal of Legal Studies, XXXI, 233–271.
Sahlin-Andersson, K. (1996). Imitating by editing success: The Construction of organizational fields. In B. Czarniawska & G. Sevón (Eds.), Translating organizational change. Berlin and New York: Walter de Gruyter.
Scott, R. (1995). Institutions and organizations (2nd ed.). Thousand Oaks: Sage.
Shleifer, A. & Vishny, R. (1997). A survey of corporate governance. Journal of Finance, 52(2), 737–783.
Sjöstrand, S. E. & Petrelius, P. (2002). Rekrytering av koncernstyrelser: Nomineringsförfaranden och styrelsesammansättning med fokus på kvinnors ställning och möjligheter. [The recruitment of boards – nomination practices and composition focusing on women’s position and possibilities]. Stockholm: EFI & SNS förlag.
Skog, R. (2004). A remarkable decade: The awakening of Swedish institutional investors. In M. Isaksson & R. Skog (Eds.), The future of corporate governance. Stockholm, Visby: eddy.se.
Spira, L. (1999). Independence in corporate governance: the audit committee role. Business ethics: A European Review, 8(4), 262–273.
Teubner, G. (1998). Legal irritants: Good faith in British law or How unifying law ends up in new divergences. The Modern Law Review, 61(1), 11–32.
Tolbert, P. S., & Zucker, L. G. (1983). Institutional sources of change in the formal structure of organizations: The diffusion of civil service reform, 1880–1935. Administrative Science Quarterly, 28(1), 22–39.
Watson, A. (1974). Legal transplants: An approach to comparative law. Athens and London: University of Georgia Press.
Acknowledgement
The author acknowledges financial support from the Handelsbanken Re-search Foundation.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2010 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Larsson-Olaison, U. (2010). The Translation of Transplanted Rules: The Case of the Swedish Nomination Committee. In: Jemielniak, J., Miklaszewicz, P. (eds) Interpretation of Law in the Global World: From Particularism to a Universal Approach. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-04886-9_16
Download citation
DOI: https://doi.org/10.1007/978-3-642-04886-9_16
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-04885-2
Online ISBN: 978-3-642-04886-9
eBook Packages: Humanities, Social Sciences and LawLaw and Criminology (R0)