It would not be possible to create a global corporate governance code - Essay Example

Over the several years ago, the major issue in corporate governance is a convergence' that has attracting many scholars and commentators in business field. The main reasons behind this approach are; the trend of globalization across the world and financial scandals that happened in many countries globally1. Most comparatives in this area have claimed that one or the other model is economically superior and that, over time, we should see convergence towards this model of best practice'. Although the shareholder model was heavily criticized in the early 1990s for the tendencies to under-invest and focus on short-term result2, at present the majority view is that the shareholder model will prevail due to the increasing dominance of institutional investors on international capital markets3.

The convergence discussion focuses upon whether the increasing internationalization of capital markets and commerce will and should result in the harmonization of corporate governance standards across national boundaries. . eavily criticized in the early 1990s for the tendencies to under-invest and focus on short-term result2, at present the majority view is that the shareholder model will prevail due to the increasing dominance of institutional investors on international capital markets3. The convergence discussion focuses upon whether the increasing internationalization of capital markets and commerce will and should result in the harmonization of corporate governance standards across national boundaries.

Within this discussion, some scholars and policymakers tout conversion as imminent, inevitable, and invaluable4. Others expect harmonization of national corporate governance standards to be slowed by path-dependent factors such as local cultural values and the broader political and legal economics of the nation- state5. In addition to these differences of view pertaining to expected rates of convergence in term of its source. Some anticipate that convergence will be a formal matter, stemming from change that would align countries' positive law with one another6.

Still others rely upon a more functional view of convergence, nothing that positive law is often trumped by effects of soft' law such exchange listing standards, voluntary corporate codes of conduct, and other business and regulatory norms7. What has been characterised as convergence is a discussion of Anglo-American domination. Convergence, after all, means to move or be directed toward each other or toward the same place, purpose, or result'8. The only significant movement in Anglo-American corporate governance standards, however, is an exported commodity being sold to both developed and developing nations9.

Moreover, these domination tendencies are not confined solely to academic. For