Corporate Governance in Scandinavia

This article addresses the role of formal institutions and informal networks on corporate governance practices. The existing corporate governance literature has mostly examined the formal institutions, such as the effect of legal systems. Our contribution is to consider the effect of informal “small world” characteristics of ownership and board networks. We use the case of Scandinavia (Denmark, Norway and Sweden) to examine these effects. Our empirical results reveal large differences in formal board and ownership structures between the Scandinavian countries, but strong similarities in terms of law enforcement, political stability, government effectiveness, rule of law, control of corrupti…