1.3.2 The standard school

According to the standard school the globalisation of national economies and capital markets makes corporate governance systems converge into one standard model. Within this school two variants exist: the market-oriented model and the hybrid model. Adherents of the market-orientated model believe that this model will survive as the superior corporate governance model and no serious competitive models will exist (Hansman and Kraakman 2002, p. 76). The market is seen as the only relevant factor which drives the different models towards the market-orientated model that can be considered similar to the outsider or shareholder model (Van den Berghe 2002, p. 13). The market-oriented model is based on a strong belief in the 'soll'-world1 (Brouwer and Moerman 2005, p. 27), has strong normative elements and is part of the Chicago school (Bratton and McCahery 2002, p. 34). The market mechanism is regarded as supreme and in the end the outsider system will lead to higher wealth for all parties involved (Van den Berghe 2002, p. 14). The adherents state that "the blockholder system will gradually develop more liquid capital markets, copy Anglo-American style financial regulation, stimulate better shareholder rights, better enforceability in courts and dismantling complex shareholdings" (Van den Berghe 2002, p. 14).

One must acknowledge that some of their predictions have turned out to be correct: for instance the capital markets have become more liquid and the shareholders more active, SOX has had a substantial influence on financial regulation in the EU and shareholder rights have been improved by EU directives. Another possibility within the standard school is that a hybrid model - achieved by global competition - will survive as the superior corporate governance model. The adherents of the hybrid model believe in the cross-reference hypothesis; corporate governance models are divisible and the features of a model can be detached or adapted to other models without large frictions or negative side-effects and in the end will merge into one hybrid system (Van den Berghe 2002, p. 15). By means of global competition and internationalisation the models will adapt to each other's strengths resulting in an insider system that will become more market-oriented and an outsider system that will move towards the stakeholder paradigm and in the end one hybrid best practice will survive (Van den Berghe 2002, p. 16) (Bratton and McCahery 2002, p. 24).