1.3.1 Corporate governance schools

As reviewed above, nowadays the comply or explain principle is regarded as a central element of EU corporate governance and even underpins the EU corporate governance framework. The role, defining and future of this EU corporate governance framework and thus the comply or explain principle are still a matter of debate. To come to a common understanding of the principle's scope, the conditions that need to be put in place for it to work effectively and before comparing national corporate governance systems to conclude what the current practice is (see chapters 4 and 5), the convergence debate needs to be clarified. For the purpose of this study a national corporate governance system is considered to be a specific set of rules and regulations on corporate governance in one country together with the specific country-like characteristics of this system. A corporate governance model is more general than a system and supranational. Several systems can be placed under one broad model; those national systems have certain common main characteristics that constitute the model. Like the corporate governance systems, the models change and evolve; however models are a bit more of a constant phenomenon and are acknowledged as such in literature. One of the main topics regarding the future of the EU corporate governance model and the national corporate governance systems is which system or model will dominate in the end, especially since Europe has such diversity in corporate governance systems. For example, the UK system has strong Anglo-Saxon influences, the German and Dutch systems can be named Rhineland, and Belgium, Italy and the more southern systems can be considered as Latin (Van den Berghe 2002, p. 8) (Clarke 2007, p. 170 and 173). This section deals with this convergence debate; the different schools and the possible outcomes are reviewed to take this further into account when reviewing the five corporate governance systems in the countries under research, as well as what the contribution of the existing EU regulatory corporate governance framework (among which Directive 2006/46/ EC) and more specifically the comply or explain principle should be.

In the debate about convergence several corporate governance schools can be distinguished, as will be further clarified in the subsections below (see figure 1.3.1).