To Örebro University

Due to a rising debate concerning corporate governance that has caused increasing demands for companies’ transparency, several codes of conduct have been introduced. The Swedish Code for Corporate Governance is obliged to companies with a turnover exceeding three billions. There are companies that voluntarily apply the Swedish Code. Possible causes to this phenomenon ought to be that the code for corporate governance conveys legitimacy through the insight into the affairs of a company the public receives, through the report of the corporate governance that is published in the annual report and on the home page of the company. This insight increases the confidence and faith in the company that furthermore results in increased competitiveness and increased stock value. This Thesis inquires into how the market values the new information the use of the Swedish code convey.

To carry out this problem we have preformed two different surveys. The first one maps out how frequent the use of the code is in the small cap segment on the Stockholm Stock Exchange. Whereas the second survey inquire into how the share prices have evolved in two different segments, in companies that have implemented the code respectively in companies that have chosen not to put the Code into practice. The result of the second survey is tested in a Wilcoxcon Signed Rank Test for Matched Pair Experiment to determine whether there exists a relation between the Code and stock value.

Our study point out that there is not a specific branch of trade that prioritizes the code in a higher extent than another, in the small cap segment. Regarding the relation between use of Code and stock value our survey proves that companies that have implemented the code have a higher development of relative share price. The Wilcoxcon Signed-Rank Test proves that the median for companies using the code is higher than for companies without the code, with 97,5 percentage points certainty. The voluntarily implementation indicates that if relevant facts are communicated correctly the share value increases.