The Anglo-American versus the Continental European corporate governance model: empirical evidence of board composititon in Belgium

Abstract

This study compares two corporate governance models: 1. the Anglo-American, and 2. the Continental European model. These corporate governance models differ strongly, and the differences are mainly due to differences in the business context. The problems arising from separation of ownership from control will thus have to be solved through different mechanisms. One important mechanism is the board of directors. The board composition of 122 companies has been analyzed in a Belgian empirical study. A significant positive relationship between the number of directors in the board and a range of other factors is found. Shareholder structure does not seem to have an effect on the size of the board. A second variable concerning the composition of the board is the percentage of external directors. The number of external directors differs significantly between companies with a different nationality and between companies that are listed or not. Size, shareholder structure and industry were not related to the percentage of external directors in a company.