The Politics of Corporate Governance Reforms: Switzerland and Germany in Comparison.

Germany and Switzerland are both countries with a corporate governance system that is usually classified, in opposition to the ?market-centred? corporate governance systems of Anglo-Saxon countries, as belonging to the continental European ?Insider? or ?bank-centred? model. During the last twenty years, in a context of increasing international pressures (mainly linked to the liberalisation of financial markets), the regulatory framework of the two countries? corporate governance systems (company law, financial market regulations and accounting standards) have been considerably reformed towards a more liberal and market-oriented corporate governance system. In this paper, we analyse the political processes that led to these regulatory changes, which are not automatic adjustment and responses to new economic circumstances, but involve policy debates between the economic and political actors. In such a perspective, we can observe that even if the evolution of the regulatory frameworks went in the same direction in both cases, the political processes that led to these policy outcomes were quite different. In Switzerland, with its broad and encompassing political decision-making processes, power relations are very stable and consensual agreements between the major political actors are necessary in order to achieve policy change. Therefore, regulatory reforms in Switzerland were less far-reaching in comparison to the German ones. Regulatory reforms were made possible only because preferences concerning liberalisation of the Swiss corporate governance system of a considerable part of centre-right MPs, with close ties with economic interests, changed at the end of the 1980s strengthening, thus, the ? until then ? mostly social-democratic ?transparency coalition?. In Germany, on the other hand, the preferences of the major political parties and economic actors remained much more stable during the last two decades concerning corporate governance issues: the SPD and the FDP were favourable to liberalisation whereas the CDU defended the traditional system. In this context, changes were made possible not by changing coalitions, but by changing power relations. Once the SPD, acceded to governmental power, quite far-reaching changes were possible. [ABSTRACT FROM AUTHOR]