Chapter 4: Financial Companies

Ever since corporate governance crossed the Atlantic Ocean, it has been broadly and multifacetedly discussed. Amongst other governance-related subjects its implementation in various fields has been an issue. As a remedy, different forms of corporate governance (such as industrial and the social governance) were developed. Financial governance, which is not part of industrial, or social governance, became a topic of discussion later. However, since the recent financial crisis, the literature has paid particular attention to it, as the number of publications dealing with financial governance shows (Hopt, 2011, 2013; Kirton, 2005; OECD, 2009; Underhill & Zhang, 2008). In their analysis of financial firms that experienced the financial crisis in 2007 and 2008, Erkens, Hung, and Matos (2012) found, for example, that companies with more independent boards and higher institutional ownership suffered worse stock returns.