Decoupling as a Sustainable Firm Response to Pressures for Convergence and Divergence in Corporate Governance: The Case of Codes of Good Corporate Governance

Abstract

Whether corporate governance systems, policies, and practices are converging to the Anglo-American model is an intensely debated issue. This article addresses the convergence-divergence debate in corporate governance in the context of the diffusion of codes of good governance. Rather than joining the “either-or” debate, a model is being presented in which drivers of convergence and impediments to convergence are simultaneously considered as determinants of the depth of convergence outcomes. The notion of sustainable strategic decoupling is introduced to address these dynamics at the firm level of analysis and to highlight that firms can actively respond to conflicting institutional pressures for change and continuity by making strategic choices.