Deck 8: A Reference Dictionary of Corporate Governance Systems: Global Corporate Governance

Question 1

Select two countries from the 'reference dictionary' in this chapter and compare and contrast their systems of corporate governance. Research these countries' systems of corporate governance using newspapers, academic articles and the Internet. Consider the corporate governance reforms that have taken place there. To what extent do you feel these have been successful?

Answer 1

The discussion in this question continues from the basis of the discussion in the questions from Chapter 7. Whereas those questions focused debate on the type of systems and frameworks underlying corporate governance reform in countries around the world, this question focuses students on the 'nitty gritty' of corporate governance reform. What specific initiatives have countries adopted in order to reform corporate governance?
Are they working?
Are the changes genuine or cosmetic?
These judgements are difficult to make, but not impossible. Students can find official documentation (codes of practice, etc.) but should supplement this with newspaper references. All countries seem to have national newspapers with English versions which are available online; it just takes a bit of time to find them. Further, all the ones we have searched seem to be full of references to corporate governance reform over the past couple of years. One of the most interesting activities is to dig up articles which give the positions of different sectors, such as the investment community, trade and industry bodies, government, society, etc. These viewpoints provide a basis for coming to conclusions about whether or not the reforms have been taken on board by all sectors of society or whether they face strong opposition from the corporate sector, for example. Also, judgements can be made from press material about the nature of the changes. Are the reforms only skin deep?

Question 2

Read the OECD Principles on Corporate Governance (OECD, 1999). Choose two countries listed in the 'reference dictionary' and evaluate the extent to which you think they are adopting these principles. To assist you, there are a selection of country assessments on the World Bank website (http://www.worldbank.org). These assess each country's success in complying with the Principles.

Answer 2

The OECD Principles provide an excellent focal point for discussion and comparison. The World Bank Reports (if available for the countries selected) are highly analytical and technical but do provide a useful starting point for discussion. The discussion again should follow the lines suggested for Question 1 above. The more diversity of country selection that can be encouraged among the students, the more interesting and productive the debate should be. Students can also look at the newer version of the principles included in the appendix to see how things have evolved from their initial introduction. Most of the individual codes of practice have been based on the 1999 version which is why I have specified this here - and it is still available on the net. However, if students want to rely on the appendix version for this question then it should provide a comparable basis. There may, however be more emphasis on issues not included in the codes of their chosen countries, because of developments in the updated version (for example greater emphasis on CSR). Students may wish to download the latest version and compare and contrast it with the earlier set of Principles to see how they have evolved over time.

Question 3

Choose a country that is not covered in the 'reference dictionary'. Search for information relating to corporate governance in the country of your choice, using the Internet and academic journals. Is this country reforming its system of corporate governance? If so, describe the ways in which this is occurring and the extent to which you think the country's evolving system of corporate governance is converging with other systems around the world.

Answer 3

This question could be incorporated into class discussion by splitting the class into two parts. One half of the students could be asked to research countries in the 'reference dictionary'. The other half could be asked to research those not found in the dictionary. Perhaps students, as an assignment, could be asked to create their own reference dictionary, compiled from countries not included in the textbook, following the same type of format.

Question 4

Look at a selection of corporate governance codes of practice (using the Internet). Consider the different ways in which the codes deal with stakeholders. To what extent do you think corporate governance reform around the world is taking a genuine interest in stakeholder concerns?