Chapter 5

International Corporate Governance


The proper governance of companies will become as crucial to the world economy as the proper governing of countries.

James D. Wolfensohn, President of the World Bank, 1999

By adopting principles of good corporate governance, companies in developing countries can often command higher valuations, improve their profitability, and gain better access to outside capital than their poorly governed peers. Developing countries can attract more interest from local and foreign investors and reduce their vulnerability to financial crises.

World Bank website on Corporate Governance

In the early days of the twenty-first century it seems that all clashes between cultures, political systems, and religions are overshadowed by the triumph of one overarching belief system – the belief in capitalism. No single political creed was the victor of The Cold War, but free enterprise and corporations go where diplomats cannot. You want to buy a Big Mac? Just the “C” countries on the list at McDonald's website are: Canada, Chile, China, Columbia, Croatia, Cyprus, and the Czech Republic – countries with very different cultures and political and legal systems, but the same place to buy shakes and fries. Also on the list: constitutional hereditary monarchies (Bahrain, United Kingdom), emirates (United Arab Republic, Qatar), and democracies. China and Taiwan do not ...

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