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A
Comparison of Corporate Governance Systems in Four Countries
--Jüergen Schneider and Siu Y Chan
Companies
in different countries are operating in different cultural,
legal, social and economic environments. As a result, each
country has developed its own corporate governance system
that serves its business operations best. As the globalization
of business speeds up in recent years, it is unknown whether
there exists one best corporate governance system for all
countries. The purpose of this study was to compare the corporate
governance component factors in Germany, the United States
of America, Switzerland and France. The four countries were
selected because they are adopting different corporate governance
models. Their corporate governance component factors can be
classified into three groups: Those related to top management
organization, the board as whole, and individual board members.
From these comparisons, we found that although these countries
are adopting different corporate governance models, they have
developed some mechanisms (such as committees) to narrow down
the differences. Therefore, we may conclude that the corporate
governance systems adopted by different countries are converging.
© JÜergen Schneider and Siu y Chan. Reprinted with Permission.
Corporate
Governance & Ethics in 21st Century
--P K Banerjea
The
characteristics of successful companies in 21st century revolve
round a) The ability of the company to develop new technology,
b) Business will be the key generator of wealth, c) Business
shall have wider base of stakeholder, d) Board members shall
be time limited custodians of the companies and shall hold
office till they are relevant rather than as inheritor. 21st
century corporation shall change dramatically where distributed
leadership, wider stakeholder base, environment protection,
self regulation, transparency and natural justice will dominate
the scene rather than box ticking. In addition to financial
capital, human capital and natural capital, cultural capital
will finally take the due place in fulfilling corporate governance
norms. Corporate governance will move from its base definition
"Defining a relationship between those who own it and those
who manage it" to a higher level of "stock holder" and "owning
the future". Corporations will be transformed into a "corporate
community" with self-regulation rather than internal control.
Building an effective board attention requires structure,
process, culture and remuneration of directors. Board culture
has to be made intellectually stimulating rather than drab
and dreary proceedings. Finally, ethical issues are to be
tackled on war footing with the advent of new technology.
Corporations must pledge to honor their obligation to the
society by becoming eco nomic, intellectual and social assets
to each nation and community in which they operate.
© IUP. All Rights Reserved
Corporate
Governance from a Post-Communist Perspective
--Peter Mihalyi
"The
golden rule is that there are no golden rules." --G B Shaw
. The importance of corporate governance (CG) in the transition
economies hinges crucially on the neoclassical assumption
about single-layer company operation. If this is the case,
the interest of investors and managers needs to be harmonized
in a way, as it is described in the CG literature.This model
fits well to American type of listed companies. This paper
offers an alternative conclusion. There is no such thing as
"good" CG rules. It is simply not true that adherence to the
prescribed CG principles can guarantee good business, or put
it negatively, without outstanding CG capitalist firms cannot
grow. It is equally misleading to hope that good CG can in
any way seriously help to reduce macroeconomic volatilities.
The second message is that size matters more. In the globalized
world of business, size is the real guarantee of success.
Privatized Central and East European (CEE) companies are typically
not self-contained single level entities. They are merely
subordinated units of a Transnational Corporation (TNC), headquartered
somewhere else in the world. From the perspective of the TNCs,
these CEE operations are not fully-fledged companies, or profit
maximizing entities. Although these entities do have well
defined goal functions-production and/or distribution and
sometimes even research and development-but it is not expected
from them to develop a complete set of enterprise activities.
© Peter Mihalyi. The first version of the paper was presented
at seventh Annual Meeting of International Society for New
Institutional Economics, Budapest, Hungary, September 11-13,
2003. Reprinted with Permission.
From
Managing Agency System to Naresh Chandra Committee Report
on Corporate Governance
--Malla Praveen Bhasa
Interest
in corporate governance is a recent phenomenon. As Goswami
(2000) states, it is a result of a spate of corporate governance
scandals that shook the country during the early liberalization
era. Obscure companies quickly listed on the exchanges during
the stock market boom of 1993-94 only to disappear after siphoning
off public funds and leaving the retail investors with illiquid
stock. The sudden appearance of vanishing companies during
the period coupled with the emergence of a new breed of shareholders
like the foreign investors, institutional investors and mutual
funds and their demands for better governance practices has
compelled the policy makers to think of the governance anomalies
in corporate India. This paper attempts at driving home the
point that though corporate governance as a term gained currency
in the recent past, its roots can be traced back to the managing
agency system prevalent in India during the pre-independence
period. The paper wades thorugh the various available models
of governnance under which current day corporate governance
got shaped. It also discusses some policy interventions by
the government that brought corporate governance as a 'regulatory
mechanism' to the fore.
© IUP. All Rights Reserved
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