Consensus on the Comply or Explain principle (IVOR nr. 86) 2012/1.5:1.5 Introduction to the research methodology

Consensus on the Comply or Explain principle (IVOR nr. 86) 2012/1.5

1.5 Introduction to the research methodology

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

This section is a first introduction to the research methodology of the underlying study and explains which different research methods are used and for what purposes. Section 1.7 below explains in which chapters these research methods are incorporated. Specifics on the performed content analysis research are further clarified in chapter 5, as well as regarding the legal comparative research in chapter 4. In general terms: this study is partly theoretical and partly empirical research.

The next chapters sketch the theoretical framework of this study. The comply or explain principle is embedded in the concept of corporate governance. Therefore, the corporate governance related economical theories are described for the purpose and understanding of the further part of the study. The possibilities of how corporate governance and more in particular the comply or explain principle can and need to be regulated are also examined. Legal qualifications of the comply or explain principle and corporate governance codes are provided for where possible and deemed necessary. Subsequently and as a prelude to the empirical research, the comply or explain principle and its embedding in the national corporate governance systems under review will be discussed in more detail. This research part is comparative in nature: it is justified why these countries are subject to research and specific information is provided on history, development, features and characteristics of their comply or explain principle and corporate governance system, taking culture into account. Furthermore, previous studies on the comply or explain principle will be reviewed, such as reports from specially installed monitoring committees from the countries under review.

Thereafter follows the empirical research of this study. Per country under review corporate governance statements from a selection of listed companies (small, mid and large caps), covering a period of three years (2005-2007), are examined by means of content analysis. The following is examined:

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whether the annual accounts contain a corporate governance statement;

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what the percentage of compliance with the applicable corporate governance code is (solely based on the contents of the corporate governance statement);

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how many and which provisions of the applicable code are explained;

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what the nature and quality of the provided explanations is, and

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hether the explanation states that the deviation from the applicable code provision is temporary or not.

The results of this research will be analysed and compared to find whether certain trends over the years or trends among the countries under review are visible, and the hypotheses formulated beforehand will be tested.

Thereafter, the empirical and theoretical results are simultaneously taken into account to provide a common understanding of the principle's scope and the conditions that must be put in place for it to work effectively. To summarise the above, the research methodology of this study can be formulated as normative research, with descriptive and empirical elements, that is comparative in nature.

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