Comparative Corporate Governance: Old and New

“New comparative corporate governance” refers to the situation emerging after a transitional period that began in the late 1990s. In the US, the change has its roots in the 1970s, when pension plans began to convert from the defined benefit to the defined contribution structure, thus beginning a gradual process in which share ownership became more intermediated. The new institutional shareholders were in a better position to coordinate, and advocates of “good” corporate governance began to put their hopes first in takeovers, then executive compensation, and finally various forms of shareholder activism. At the same time, an increasing proportion of Americans’ pension wealth came to be indirectly tied up in the stock market, thus truly turning the US into a nation of somewhat reluctant capitalists.