Mechanisms of corporate governance going international : outlining a theory of and an initial test of the performance effects (original) (raw)
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Baltic Journal of Management, 2013
Globalisation includes international product markets and capital, but also involves internationalisation of corporate governance mechanisms. We propose that internationalisation of governance mechanisms is related to improved performance of the corporation. For example, listing at several stock markets implies pressure to improve information flow and stronger adherence to international standards, which will reduce possibility for slack. Recruiting top managers and board members from an international arena will, among other things, enlarge the market for managerial labour and the market for board members, presumably putting more pressure on present managers and board members, and increase the probability of finding an adequate new manager or new board members. An integrated EU would support the internationalisation of the mechanisms through reducing the transaction costs of Europeanization. An initial test on a sample of listed Swedish corporations indicates that the proposition could be rejected. Two main reasons can be found as an interpretation of the results 1.) that mechanisms with governance functions, such as capital structure and the board have several functions, and that the governance function is not always the most important one, and 2.) that governance mechanisms cannot be analysed in isolation, since they are included in a coherent corporate governance strategy.
On the internationalization of corporate boards: The case of Nordic firms
Journal of International Business Studies, 2013
This paper examines the internationalization of Nordic company boards during 2001-2008. Until recently, most firms in Scandinanvia and elsewhere had purely domestic boards despite the global reach of their business. However, during the last decade Nordic company boards have begun to change. Using Poisson pooled and panel estimators we find that financial rather than commercial internationalization drives board internationalization. The effect of commercial internationalizationin terms of sales and foreign operations-is positive but not significant. We find the same results when we enlarge the definition of board internationalization is extended to national directors with international experience related to boards,, work or education. However, we find no evidence that the internationalization of boards is limited by conservatism of existing national board members, language barriers or "old boys' networks".
Corporate Governance and Globalization
The ANNALS of the American Academy of Political and Social Science, 2000
Corporate governance is concerned with the institutions that influence how business corporations allocate resources and returns. There is growing interest in pressures on national systems of corporate governance to converge that are allegedly being generated by the process of globalisation, especially the global integration of financial markets. Advocates of the merits of globalisation contend that the trend will lead to a more efficient allocation of capital. Drawing on the examples of the US, Germany, and France, I argue that considerable change has indeed occurred in national governance systems. These changes cannot be understood, however, as the outcome of a market-driven, efficiency enhancing process that is autonomous of political interests. Rather realignments in corporate governance reflect the growing economic and political power of those who have accumulated financial assets, a trend that is closely related to the extent of population ageing and the social arrangements for pension provision in domestic economies as I show in the cases of the US and Germany. Domestic developments in certain national systems of corporate governance, most notably in the US and Britain, have generated international pressures for change in other corporate governance systems. As I illustrate with the case of France, an analysis of the structure of interests in the domestic corporate economy is also an important prerequisite for understanding the effects of these international pressures.
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Globalizing Corporate Governance: Convergence of Form or Function
The American Journal of Comparative Law, 2001
Globalization has led to a remarkable resurgence in the study of comparative corporate governance. This area of scholarship had been largely the domain of taxonomists, intent on cataloguing the central characteristics of national corporate governance systems, and then classifying different systems based on the specified attributes. The result was an interesting, if perhaps somewhat dry, enterprise. We learned that national corporate governance systems differed dramatically along a number of seemingly important dimensions. Some corporate governance systems, notably those of the United States and other Anglo Saxon countries, are built on the foundation of a stock market-centered capital market. Other systems, like those of Germany and Japan, rest on a bank-centered capital market. Some systems are characterized by large groupings of related corporations, like the Japanese keiretsu, Korean chaebol, or European holding company structures. Still others are notable for concentrated family control of large businesses, including Canada, Italy and, notably, Germany. 1 Management styles also differ across national systems.
Corporate governance in globalized economy
Today, company Governance is associate inevitable topic of debate in company boardrooms, educational round tables, and for policy manufacturers worldwide. many events are to blame for the heightened interest in company governance. company implosions over the last 10 years and also the future enlarged demand for continuous improvement and transparency within the room have heightened the pace of amendment for boards worldwide. Next few years ar expected to continue this trend. The wave of economic crises of 1998 in Russia, Asia and Brazil, affected their entire economies and deficiencies in company governance vulnerable the soundness of the worldwide financial setup .