O world! world! world! Thus is the poor agent despised.
— William Shakespeare
Corporate governance refers to the ways in which major stakeholders exert control over the corporation and ensure themselves a return on their investment. Each nation's laws, regulatory framework, and legal institutions and conventions determine stakeholder rights in corporate governance. These national systems influence many aspects of economic life:
Although national legal systems share many common characteristics, they also are shaped by unique legal, political, social, and economic forces that determine the ways in which corporations are governed and perform. This in turn affects the frequency and form of cross-border mergers, acquisitions, divestitures, and reorganizations.
Each nation has its own unique corporate governance system, with varying powers being wielded by corporate stakeholders including equity shareholders, bondholders, managers, employees, suppliers, customers, founding (perhaps royal) families, business groups, and governments. The market-based corporate governance of large firms in the United Kingdom and the United States is characterized by a large proportion of public ...