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European Corporate Governance: a Thematic Analysis of National Codes of Governance


  • We would like to thank an anonymous referee for detailed and insightful comments. We are also grateful for helpful comments from participants at the FMA 2008 meeting in Dallas, TX. Correspondence: Stephen P. Ferris.


Using Latent Semantic Analysis techniques to analyse the corporate governance codes of 23 EU nations, we obtain a number of new findings regarding their thematic content, variability, and convergence. We determine that these codes can be decomposed into five common themes, with substantial cross-sectional variability in their relative importance. We also find that the themes contained in these codes cluster in ways that are not fully consistent with the legal regime classifications of La Porta et al. (1997) , leading us to construct two new country clusters. We further discover that the identity of the code issuer (e.g., government versus stock exchange) is important in explaining a code's primary theme as well as changes in theme prominence over time. Finally, we fail to find evidence of an unchecked thematic convergence towards an Anglo-Saxon model of corporate governance, with some code themes converging to UK practices while others diverge.