When the Solution Becomes the Problem: The Triple Failure of Corporate Governance Codes

  • Beate SjåfjellEmail author


Corporate governance codes are widely regarded as the ultimate sign of a modern and efficient market economy. Bypassing the comparatively slow machinery of legislation, corporate governance codes are now a common instrument for corporations and shareholders to signal their perceptions of best practice and steer the governance of corporations in the desired direction. When a country’s corporate legislation is amended, corporate governance codes tend to be altered too—to always be one step ahead. But in what direction are these steps taking us? And who is deciding the aims and means? Already in 2006, Steen Thomsen criticised corporate governance codes for lacking a ‘theoretical or empirical rationale’ to the extent that they are ‘unlikely to do much good (and if so only by accident)’. Since then, corporate social responsibility language has made its way into ever more codes, without this necessarily resolving any of the increasingly cited issues with the codes.


Corporate Social Responsibility European Union Corporate Governance Supervisory Board Corporate Sustainability 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



This chapter is a part of the project Sustainable Market Actors for Responsible Trade (SMART). SMART has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 693642, and I gratefully acknowledge its support. This chapter was presented as a working paper at the ICGL Forum, ‘Reflections on Voluntary Corporate Governance Codes: Is it now time to move on from a ‘soft law’ approach to a ‘hard law’ approach?’, Hong Kong, 25–26 April 2016. I am grateful to Jean du Plessis for inviting me to the conference and for his and the other participants’ inspiring remarks, to Paige Morrow and Jukka Mähönen for insightful feedback to the text, and to research assistants Jon Anders Lunde, Kaja Harms and Vegard Gjertsen, for invaluable assistance in various phases of the work with this chapter. All opinions are my own and the usual disclaimers apply.


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© Springer International Publishing Switzerland 2017

Authors and Affiliations

  1. 1.Department of Private Law, Faculty of LawUniversity of OsloOsloNorway

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