Varieties of Insider Corporate Governance: Centre-Right Preferences and the Determinants of Reform in the Netherlands, Sweden and Switzerland

The impact of centre-left political parties' preferences on a given country's corporate governance system has been widely debated and empirically investigated. Comparatively few efforts have been made to analyse the preferences of centre-right parties and to link these to the 'employer side' of the corporate governance equation. Recent scholarship sought to explain centre-right preferences in corporate governance reforms by electoral strategies that appeal to the median voter, arguing that the aggregate ownership structure that prevails in a country is the main determinant of the politics of corporate governance reforms. In this paper, I challenge this electoral strategy explanation by opposing it to an interest group power explanation of centre-right preferences. Based on the cases of the Netherlands, Sweden and Switzerland I show that the ownership patterns do not explain political preferences. Instead, opening up the black box of insider-orientated corporate governance systems is necessary in order to explain why centre-right parties' preferences concerning shareholder primacy vary from one country to the other. My findings suggest that the extent to which insider control relies on control enhancing mechanisms (CEMs) and the importance of the financial sector in a given economy strongly influence centre-right preferences in the political struggles over corporate governance.