Corporate Governance in the Aftermath of the Global Financial Crisis, Volume IV: Emerging Issues in Corporate Governance by Zabihollah Rezaee

Author:Zabihollah Rezaee
Language: eng
Format: epub, pdf
Publisher: Business Expert Press
Published: 2018-03-11T16:00:00+00:00

Global Corporate Governance

With globalization working through local economies via deregulation and modern market reforms, the convergence of local financial reporting standards with international accounting standards has become imperative. Several initiatives have been taken during the past decade to improve corporate governance worldwide. Many of these initiatives are primarily national. No globally accepted set of corporate governance principles or a global regulatory framework governs corporations, financial institutions, or capital markets. Regulators in the United States, the SEC, IOSCO, and the World Federation of Exchanges have yet to agree on a global regulatory framework or a global corporate governance structure. The OECD’s international standards of corporate governance have not achieved acceptance to be included in the global regulatory framework.

The International Corporate Governance Network (ICGN) was founded in 1995 by institutional investors, companies, financial intermediaries, academics, and other parties interested in the establishment of global corporate governance practices.5 The ICGN adopted corporate governance principles developed by the OECD as minimum acceptable standards for companies and investors worldwide and highly recommends that companies use the adopted principles as best practices. The ICGN’s principles are comprehensive enough to be applicable to corporations throughout the world. However, companies worldwide should establish their own corporate governance code comparable to ICGN principles and tailored to their political, cultural, economic, legal, and regulatory environment. In addition to the need for global corporate governance, the following are some of the other emerging issues:

Corporate governance reforms should create an environment in which public companies can operate in creating shareholders’ value, protecting the interests of other stakeholders, and rebuilding investors’ trust through effective enforcement of these reforms. Regulations must be cost-effective, efficient, and scalable.

Global corporate governance reforms should address the systematic risk involved in all business transactions, particularly the risk of business failures and potential insolvency, protect the interests of all stakeholders (investors, government, customers, creditors, suppliers, employees, society), promote accountability for businesses and their directors and officers, and encourage convergence and global cooperation and coordination.

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