Document Type : Research Article
Authors
1
Assistant Professor, Department of Law, Faculty of Theology and Islamic Studies, Meybod University, Meybod, Iran.
2
LLM Student in Private Law, Faculty of Theology and Islamic Studies, Meybod University, Meybod, Iran.
Abstract
∴ Introduction ∴
The concept of the "Corporate Governance Regime" has inspired varied perspectives globally, traditionally categorized into the Anglo-American, Continental European, and East Asian approaches. Over the last two decades, however, the "Nordic Approach" (semi-dualistic) has emerged from within the Continental European framework in Scandinavian countries. Its fundamental tenets include reliance on the Stakeholder Theory, recognition of the Controlling Shareholder, and Employee Participation in the Board of Directors. This model is further characterized by indicators such as Concentrated Ownership, a Semi-Dual Board structure, Bank-Centric Financial Provision, and High Financial Transparency. Despite noteworthy efforts in Iranian law, including mandatory regulations issued by the Securities and Exchange Organization (SEO) for joint-stock companies active in the stock exchange, the absence of coherent, unitary, and comprehensive regulations regarding corporate governance continues to pose challenges for supervision and operation in Iran.
∴ Research Question ∴
The primary research question addresses the formal structure of the Corporate Governance Regime by seeking to explore the distinctions and commonalities between the Nordic Approach and Iranian law. Specifically, the study investigates the features of the Nordic Approach—including its organizational pillars and key indicators—to determine how they align or diverge from the existing, often fragmented, corporate governance landscape found in Iran and the legal requirements governing Iranian joint-stock companies.
∴ Research Hypothesis ∴
The article hypothesizes that despite observable differences in most key areas between the Nordic Approach and Iranian law, except in the index of ‘Financial Transparency’ and ‘Disclosure of Information’, a comparative study of this approach offers significant assistance in designing a specific, indigenous model for Iranian corporate governance. This hypothesis implies that while the existing Iranian legal system demonstrates inconsistency across several crucial governance features, certain progressive elements, particularly transparency requirements, show alignment with Nordic standards.
∴ Methodology & Framework, if Applicable ∴
This research employs a comparative study utilizing an analytical-descriptive methodology based on library sources. The framework centers on dissecting and comparing the core components of the Nordic Approach, particularly its four key indicators: Concentrated Ownership, the Semi-Dual Board structure, Bank-Centric Financing, and High Financial Transparency. This comparison evaluates the corresponding regulatory provisions and practical tendencies found within the Iranian legal system, which currently lacks a unified or singular corporate governance approach.
∴ Results & Discussion ∴
The analysis reveals that the Iranian legal system generally exhibits an inconsistent and non-integrated approach to corporate governance. For key structural indicators, divergence from the Nordic model is evident: Iran generally favors non-concentrated share ownership, operates primarily on a Single-Tier Board structure, and relies on internal resources and market-centric financing, contrasting with the Nordic reliance on bank-centric funding. However, the research affirms that concerning Financial Transparency and Disclosure of Information, Iranian law, particularly through the SEO's directives for listed companies, has taken major steps that align with the high standards emphasized by the Nordic Approach. The study concludes that the dependency on banks for financing is a serious weakness of the Nordic model, whereas the emphasis on employee participation and concentrated ownership are positive features.
∴ Conclusion ∴
The article concludes that while full adoption of the Nordic model is unsuitable for Iran due to differing legal foundations and economic structures, its positive features merit critical consideration for domestic reform. The absence of a unified CG structure in Iran necessitates reform that incorporates structural alterations. Key recommendations include the allocation of an independent section to the corporate governance regime in the future Commercial Companies Law. Furthermore, the establishment of a supervisory body within the board structure that incorporates shareholders and employees, increasing incentives for market participation (to reduce reliance on specific investor classes or banks), and fully integrating the high financial transparency requirements into the future law are proposed to enhance the structure and stability of Iranian joint-stock companies.
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