Financial systems and corporate governance: A review of the international evidence

This paper reviews international evidence on the interaction between financial systems and corporate governance structures. It examines how different financial architectures— bank-based versus market-based systems shape governance mechanisms and corporate performance across countries. By analyzing comparative institutional frameworks, investor protection laws, and firm-level practices, the paper highlights how financial systems influence ownership concentration, board structures, and managerial accountability. The review also explores the ongoing convergence in governance standards due to globalization, regulatory harmonization, and capital mobility. While no one-size fits all model, strong legal enforcement, transparency, and adaptive governance remain critical across contexts. The paper concludes with implications for emerging markets and policy reforms aimed at fostering sustainable financial development and corporate accountability.