The Role of Self-Regulation in Corporate Governance:

This paper assesses the effectiveness of the Netherlands’ private sector initiative on selfregulation to improve corporate governance. We compare corporate governance characteristics and the relation between firm value and these characteristics before and after the private sector initiative. We find that the recommendations of the private sector initiative had no substantive effect on corporate governance characteristics or their relationship with firm value. Using event study techniques we document the market’s skepticism about the successful evolution of corporate governance practices in the Netherlands through selfregulation. The one exception to this general conclusion is the market for new listings. The Netherlands initiative suggests that little can be expected from self-regulation initiatives that rely on monitoring without enforcement. The Role of Self-Regulation in Corporate Governance: Evidence from The Netherlands