Essentials of Corporate Governance

Chapter 10. International Corporate Governance

After reading this chapter, you will be able to

• Understand that variations exist among the corporations of different countries

• Understand the concept of the international corporation

• Understand the influence of international investors

• Understand the role of the Global Corporate Governance Forum

Although this book’s principal focus has been Corporate Governance and the U.S. corporation, no picture can be complete without taking a look at the international perspective.

In today’s economy, the concept of the borderless corporation is becoming increasingly ubiquitous. There are few restrictions placed on investors who would like to purchase shares in international companies. There is also a strong trend toward the globalization of markets in which corporations themselves do not operate within confined borders but hold subsidiaries in several countries.

The international marketplace creates very specific complications for the establishment of good Corporate Governance practices. As previously discussed, corporations and their structure are unique to the countries in which they are situated. Their structures and practices have evolved from the unique political and social landscapes in which they are embedded.

This is the primary reason why Corporate Governance best practices are designed as guides to be adapted for specific circumstances rather than uniform implementation. Complications arise when companies are established in several unique marketplaces ...