Governance depends on both country-level as well as firm-level mechanisms. The country-level governance mechanisms include a country’s laws, its culture and norms, and the institutions that enforce the laws. Firm level or internal governance mechanisms are those that operate within the firm. Apart from firm-level governance mechanism, it is also important to study whether the institutional, legal and regulatory environments for shareholder protection rights and the corporate governance structure are complementary or substitute of each other. This research looks into the institutional, legal and regulatory environments of the US, UK, Luxembourg and India from the perspective of corporate governance and disclosure practices by studying a sample of 54 firms across various sectors listed on the Bombay Stock Exchange, India. The research seeks to empirically investigate whether they are significantly different for firms cross-listed in those countries. The research suggests that legal and regulatory environments for corporate governance and internal corporate governance are not substitutes. On the contrary, they are complementary because strong corporate governance at the country level reinforces the effectiveness of internal governance at the firm level, increasing the effect of internal corporate governance.

Corporate governance and disclosure practices of listed firms having global exposure are different from firms having only domestic exposure. Domestic listed firms are listed in the home country only and are governed by local institutional environment of their home country, and there is limited pressure on these firms to adapt to the local environment arising only from institutional, legal and regulatory environment of the home country. However, this may not be the case for firms globally exposed such as cross-listed firms. Cross-listing involves a firm that is already trading on its home country’s stock exchange, and deciding to also list on an international exchange. Cross-listed firms need to conform to the laws, values and norms of the overseas host country in which they are listed as well as the home country in which they operate.

In a cross-country setting of firms listing, the variety in corporate governance practices increases. Hence, it is possible that cross-listed firms, i.e., multiple listed firms, internalize some aspects of foreign regulation of their host country and exhibit higher level of corporate governance and disclosure. Also given the differences in legal regimes and consequent requirements, it becomes more important to capture as many corporate governance aspects as possible. Although both legal and regulatory regimes and company practices have been found to matter in corporate governance by how much each does and the interaction between legal and regulatory regimes and company practices, has not much been researched to date. This research highlights some aspects of legal regimes and corporate governance practices of firms listed across various regulatory environments such as India, Europe (UK and Luxembourg) and the US. The research also looks into institutional, legal and regulatory environments of the US, UK and Luxembourg from the perspectives of corporate governance and disclosure practices, to examine whether they are significantly different for firms listed in those countries.

Corporate Governance Journal, New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE), Legal and Regulatory Environment, Corporate Governance, Disclosure Practices, Firms Listed, Bombay Stock Exchange.