The Handbook of Board Governance, 2nd Edition

56Cross-Border Corporate Governance

Hari Panday FCGA FCPA ICD.D

President and CEO, PanVest Capital Corporations; and Professional Director and Board Chair

Historical Perspectives

In the course of the last few decades, companies in maturing economies, say, G7 countries,¹ have been heavily involved in international trade and commerce, expanding their footprint well beyond their own shores. The so-called globalization of trade and commerce often involved bilateral and multilateral arrangements shaping as trading blocks with preferred arrangements among signatory nations in some known and many new international markets. Through these mercantile and geopolitical experiences several new variables have surfaced in economic, capital flows, and national security aspects to name a few, increasingly intertwined with political interests, bringing complexities and unanticipated market dynamics.

For achieving their strategic goals, companies use a variety of ownership structures and sophisticated mechanisms. Direct sale of goods and services through full or partial ownership in overseas entities has now marched on to joint-venture agreements, licensing, brand and distribution channel arrangements, royalty agreements, and equity positions in either open market or unlisted or private entities. In addition, companies in G7 countries have long viewed low input costs in overseas operations as a strategic competitive advantage, particularly for scaling up their revenues, profitability, return ...