IDEAS home Printed from https://ideas.repec.org/a/eee/intman/v15y2009i3p306-316.html
   My bibliography  Save this article

Tightening corporate governance

Author

Listed:
  • Windsor, Duane

Abstract

Tightening corporate governance in multinational corporations (MNCs) is difficult because of confusion over the proper conception of governance, competing pressures on and complex attributes of MNCs, and the fact that many prescriptions are untested. This article documents multiple pressures on MNCs and recommends how management should cope with those pressures. Tightening governance directly concerns pressures from investors, exchanges, and regulators for adoption of recommended standards and practices to increase financial transparency and fiduciary accountability. MNCs also face pressures for corporate social responsibility (CSR). Short-term financial performance and longer-term financial viability may conflict with one another and also with the social and environmental components of triple bottom line performance. MNCs are organizationally complex to manage. Geographical diversity peculiarly means great variance in legal systems, other non-market institutions, and MNC governance and CSR approaches across country units. International standards for governance and reporting are not well established; and enforcement occurs largely by stock exchanges and national jurisdictions.

Suggested Citation

  • Windsor, Duane, 2009. "Tightening corporate governance," Journal of International Management, Elsevier, vol. 15(3), pages 306-316, September.
  • Handle: RePEc:eee:intman:v:15:y:2009:i:3:p:306-316
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1075425309000489
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jere Francis & Inder Khurana & Xiumin Martin & Raynolde Pereira, 2008. "The Role of Firm-Specific Incentives and Country Factors in Explaining Voluntary IAS Adoptions: Evidence from Private Firms," European Accounting Review, Taylor & Francis Journals, vol. 17(2), pages 331-360.
    2. Geoffrey C. Kiel & Kevin Hendry & Gavin J. Nicholson, 2006. "Corporate Governance Options for the Local Subsidiaries of Multinational Enterprises," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(6), pages 568-576, November.
    3. Ciaran Driver & Grahame Thompson, 2002. "Corporate Governance and Democracy: The Stakeholder Debate Revisited," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 6(2), pages 111-130, May.
    4. Xavier Gabaix & Augustin Landier, 2008. "Why has CEO Pay Increased So Much?," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 49-100.
    5. Priya P. Lele & Mathias M. Siems, 2007. "Diversity in Shareholder Protection in Common Law Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 5(1), pages 3-9, 05.
    6. Bennett Stewart, 2006. "The "Real" Reasons Enron Failed," Journal of Applied Corporate Finance, Morgan Stanley, vol. 18(2), pages 116-119.
    7. Mihir A. Desai & Alberto Moel, 2008. "Czech Mate: Expropriation and Investor Protection in a Converging World," Review of Finance, European Finance Association, vol. 12(1), pages 221-251.
    8. Elisabeth Dedman, 2000. "An Investigation into the Determinants of UK Board Structure Before and After Cadbury," Corporate Governance: An International Review, Wiley Blackwell, vol. 8(2), pages 133-153, April.
    9. Udayasankar, Krishna & Das, Shobha & Krishnamurti, Chandrasekhar, 2008. "When is Two Really Company? The Effects of Competition and Regulation on Corporate Governance," Working Paper Series 4020, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    10. Shleifer, Andrei & Vishny, Robert W, 1997. " A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    11. Alan M Rugman & Alain Verbeke, 2003. "Extending the theory of the multinational enterprise: internalization and strategic management perspectives," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(2), pages 125-137, March.
    12. Ian Jones & Michael Pollitt, 2004. "Understanding How Issues in Corporate Governance Develop: Cadbury Report to Higgs Review," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(2), pages 162-171, April.
    13. Tylecote, Andrew & Ramirez, Paulina, 2006. "Corporate governance and innovation: The UK compared with the US and 'insider' economies," Research Policy, Elsevier, vol. 35(1), pages 160-180, February.
    14. Stephen G. Sapp, 2008. "The Impact of Corporate Governance on Executive Compensation," European Financial Management, European Financial Management Association, vol. 14(4), pages 710-746.
    15. Lucian Bebchuk & Alma Cohen & Allen Ferrell, 2009. "What Matters in Corporate Governance?," Review of Financial Studies, Society for Financial Studies, vol. 22(2), pages 783-827, February.
    16. Masaru Yoshimori, 2005. "Does Corporate Governance Matter? Why the Corporate Performance of Toyota and Canon is Superior to GM and Xerox," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(3), pages 447-457, May.
    17. repec:hrv:faseco:30747191 is not listed on IDEAS
    18. repec:hrv:faseco:30728046 is not listed on IDEAS
    19. Tarun Khanna & Joe Kogan & Krishna Palepu, 2006. "Globalization and Similarities in Corporate Governance: A Cross-Country Analysis," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 69-90, February.
    20. Alpay, Guven & Bodur, Muzaffer & Ener, Hakan & Talug, Cem, 2005. "Comparing board-level governance at MNEs and local firms: lessons from Turkey," Journal of International Management, Elsevier, vol. 11(1), pages 67-86, March.
    21. Jungmann Carsten, 2006. "The Effectiveness of Corporate Governance in One-Tier and Two-Tier Board Systems – Evidence from the UK and Germany –," European Company and Financial Law Review, De Gruyter, vol. 3(4), pages 426-474, December.
    22. Chung-Hua Shen & Hsiang-Lin Chih, 2007. "Earnings Management and Corporate Governance in Asia's Emerging Markets," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 999-1021, September.
    23. Alan M Rugman & Alain Verbeke, 2004. "A perspective on regional and global strategies of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(1), pages 3-18, January.
    24. Ivan Brick & N. Chidambaran, 2008. "Board monitoring, firm risk, and external regulation," Journal of Regulatory Economics, Springer, vol. 33(1), pages 87-116, February.
    25. Holthausen, Robert W., 2003. "Testing the relative power of accounting standards versus incentives and other institutional features to influence the outcome of financial reporting in an international setting," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 271-283, December.
    26. Ghezzi Federico & Malberti Corrado, 2008. "The Two-Tier Model and the One-Tier Model of Corporate Governance in the Italian Reform of Corporate Law," European Company and Financial Law Review, De Gruyter, vol. 5(1), pages 1-47, March.
    27. Simon Deakin & Suzanne J. Konzelmann, 2004. "Learning from Enron," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(2), pages 134-142, April.
    28. Davies Paul & Rickford Jonathan, 2008. "An Introduction to the New UK Companies Act," European Company and Financial Law Review, De Gruyter, vol. 5(1), pages 48-71, March.
    29. Anlin Chen & Lanfeng Kao & Meilan Tsao & Chinshun Wu, 2007. "Building a Corporate Governance Index from the Perspectives of Ownership and Leadership for Firms in Taiwan," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 251-261, March.
    30. Steven Toms & Mike Wright, 2005. "Divergence and Convergence within Anglo-American Corporate Governance Systems: Evidence from the US and UK, 1950-2000," Business History, Taylor & Francis Journals, vol. 47(2), pages 267-295.
    31. John Buchanan & Simon Deakin, 2007. "Japan's Paradoxical Response to the new 'Global Standard' in Corporate Governance," Working Papers wp351, Centre for Business Research, University of Cambridge.
    32. Aman, Hiroyuki & Nguyen, Pascal, 2008. "Do stock prices reflect the corporate governance quality of Japanese firms?," Journal of the Japanese and International Economies, Elsevier, vol. 22(4), pages 647-662, December.
    33. Simon Deakin & Richard Hobbs, 2007. "False Dawn for CSR? Shifts in regulatory policy and the response of the corporate and financial sectors in Britain," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(1), pages 68-76, January.
    34. John Elkington, 2006. "Governance for Sustainability," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(6), pages 522-529, November.
    35. Joseph D. Piotroski & Suraj Srinivasan, 2008. "Regulation and Bonding: The Sarbanes-Oxley Act and the Flow of International Listings," Journal of Accounting Research, Wiley Blackwell, vol. 46(2), pages 383-425, May.
    36. Rafael La porta & Florencio Lopez-De-Silanes & Andrei Shleifer & Robert Vishny, 2002. "Investor Protection and Corporate Valuation," Journal of Finance, American Finance Association, vol. 57(3), pages 1147-1170, June.
    37. Lena Tsipouri & Manolis Xanthakis, 2004. "Can Corporate Governance be Rated? Ideas based on the Greek experience," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(1), pages 16-28, January.
    38. Aguilera, Ruth V. & Jackson, Gregory, 2002. "The Cross-National Diversity of Corporate Governance: Dimensions and Determinants," Working Papers 02-0108, University of Illinois at Urbana-Champaign, College of Business.
    39. Marianne Bertrand & Sendhil Mullainathan, 2001. "Are CEOs Rewarded for Luck? The Ones Without Principals Are," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 901-932.
    40. Pik Kun Liew, 2007. "Corporate Governance Reforms in Malaysia: the key leading players' perspectives," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 724-740, September.
    41. Michael A Witt & Gordon Redding, 2009. "Culture, meaning, and institutions: Executive rationale in Germany and Japan," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(5), pages 859-885, June.
    42. David Finegold & George S. Benson & David Hecht, 2007. "Corporate Boards and Company Performance: review of research in light of recent reforms," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 865-878, September.
    43. Litvak, Kate, 2007. "The effect of the Sarbanes-Oxley act on non-US companies cross-listed in the US," Journal of Corporate Finance, Elsevier, vol. 13(2-3), pages 195-228, June.
    44. Caspar Rose, 2005. "The Composition of Semi-Two-Tier Corporate Boards and Firm Performance," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(5), pages 691-701, September.
    45. Bernard S. Black & Hasung Jang & Woochan Kim, 2006. "Does Corporate Governance Predict Firms' Market Values? Evidence from Korea," Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(2), pages 366-413, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Viveros, Hector, 2017. "Unpacking stakeholder mechanisms to influence corporate social responsibility in the mining sector," Resources Policy, Elsevier, vol. 51(C), pages 1-12.
    2. Lutz Preuss, 2012. "Responsibility in Paradise? The Adoption of CSR Tools by Companies Domiciled in Tax Havens," Journal of Business Ethics, Springer, vol. 110(1), pages 1-14, September.
    3. Huseynov, Fariz & Klamm, Bonnie K., 2012. "Tax avoidance, tax management and corporate social responsibility," Journal of Corporate Finance, Elsevier, vol. 18(4), pages 804-827.
    4. Kearney, Colm, 2012. "Emerging markets research: Trends, issues and future directions," Emerging Markets Review, Elsevier, vol. 13(2), pages 159-183.
    5. Driver, Ciaran & Guedes, Maria João Coelho, 2012. "Research and development, cash flow, agency and governance: UK large companies," Research Policy, Elsevier, vol. 41(9), pages 1565-1577.
    6. Riaz, Zahid & Ray, Sangeeta & Ray, Pradeep Kanta & Kumar, Vikas, 2015. "Disclosure practices of foreign and domestic firms in Australia," Journal of World Business, Elsevier, vol. 50(4), pages 781-792.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intman:v:15:y:2009:i:3:p:306-316. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/description#description .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.