An analysis of corporate governance in the GCC countries and the impact of sharia law on it - Literature review Example

Other than the parties within the organization, corporate governance is also concerned with the relationships that exist among the stakeholders of an organization and its impact to the achievement of the organization’s goals and objectives. In modern business organizations, major external business stakeholders include trade creditor, customers, suppliers, shareholders, debtors and the general public members who are directly or indirectly affected by the corporation’s activities (Maria and Thomas, 1999).

There are also some internal stakeholders in every organization that too need to be taken care of by the management. These include the employees, board of directors, executives and management itself. The external stakeholders need more attention than the internal stakeholders since they are the one who help in meeting the expectations of the external ones. There are many debates held by scholars, researchers and modern economist on how economic well being is impacted by the corporate governance existing in a country or a certain trade block.

The issue of concern here is the welfare of shareholders, who are the most sensitive external stakeholders in every corporation. Majority of these debaters argue that there is need to establish regulatory policies to ensure that companies have given the necessary priority to the needs of shareholders. To them economy efficiency in any country depends strongly on the ability of that country to attract many domestic and international investors. This can only be achieved if shareholders are satisfied hence attracting more investors or they can even increase their investment by increasing capital (Becht, 1997), There issue of concern in this study is basically on how corporate governance has been taking place in different parts of the world with more emphasis put on the Gulf Cooperation Council Countries