5.1 Introduction

The previous chapter discussed the corporate governance systems and lay-out of the comply or explain principle of the five countries under review based on theoretical research. This chapter adds to the answering of the central research question (As concluded from legal and empirical comparative research and whilst arguing for a 'one size does not fit all' approach and 'made to measure' code compliance: how can a common understanding of the comply or explain principle's scope and its most effective form be reached within the EU corporate governance framework?) by means of empirical comparative research on the application of the comply or explain principle in practice. More specifically, the research question to be answered in this current chapter is: As analysed by comparative empirical research of five Member States: how has the comply or explain principle been applied in practice within the EU in recent years and to what extent is convergence visible in regulation and application?

The results of the empirical research and the analysis thereof are laid down in this fifth chapter. The empirical research involves analysing the application of the comply or explain principle in practice by means of content analysis of the corporate governance statements of in total 237 companies listed in Belgium, Germany, Italy, the Netherlands and the UK for the years 2005-2007. The purpose thereof is to be able to analyse the entire empirical as well as theoretical research on the comply or explain principle in chapter 6 and to provide recommendations on how the comply or explain principle should be applied in practice, i.e. the conditions that need to be put in place for it to work properly and as intended.

The lay-out of chapter 5 is as follows. Section two describes the studies previously performed on compliance. Section 5.3 formulates the hypotheses as based on the theoretical research in the previous chapters and on previous studies on the comply or explain principle. Section 5.4 describes the research design: the data collection and the methodology. Section 5.5 presents the univariate results (descriptive statistics: a description of the characteristics of the observation results (Van Dalen and De Leede 2002)), followed by the bivariate results (the relationships between pairs of variables - correlations) in section 5.6 and finally the results of the regression models in section 5.7. Section 5.8 summarises and concludes. Chapter 5 is limited to displaying and analysing the research results; only occasionally recommendations are provided and chapter 6 referred to for further argumentation.