The World Bank's assessments ofcorporate governance practices in 25 countries across fivecontinents have revealed a general commitment to comply withinternational principles. But the necessary legal changesare slow and subject to political compromise. Moreover, mostcountries have a poor track record in enforcing existinglaws and regulations. Expropriation of minority shareholderscontinues to be a problem around the world. The corporategovernance assessments show that choice can facilitatereform. Allowing different models of corporate governance tocoexist permits investors with varying risk profiles tochoose the appropriate market and company to invest in andallows market forces to pick the winners. When companieshave the choice of listing their shares on a stock marketsegment with stricter corporate governance rules or ofcomplying with a code of best practice, they can use thisoption to signal to investors that they are different. Whileestablishing a corporate governance market segment appearsto be an attractive option only for middle-income countries,codes of best practice seem to be important regardless of acountry's level of development.
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