Corporate Governance Convergence Practice in Japan

Corporate governance defined as the system of rules, practices and processes by which a company is directed and controlled. Balancing the interests of the stakeholders is essential involves in a company, which include its shareholders, management, customers, suppliers, financiers, government and community. There are five major elements of corporate governance, which are, board commitment, good board practices, functional and effective control environment, transparent disclosure, and well defined shareholder rights. To prevent corporate scandals, fraud and the criminal liability of the organization, good executed corporate governance is important and must apply and respect in the organization. There have a relationship between corporate governance and internal control, for example, the more in corporate governance, the more of internal control in the organization and the less of fraud occur. One of the tasks and goals of the corporate governance is to ensure there have adequate internal control within organization to protect the organization from any conflicts for the benefits of

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

Phenomenal growth of interest in corporate governance has emerged in recent years. The body of literature on the subject has grown markedly in response to successive waves of large corporate failures. Furthermore, there have been numerous attempts to define what constitutes ‘good corporate governance’ and to provide guidelines in order to enhance the quality of corporate governance.

In my review of A Primer on Corporate Governance by Cornelis A. de Kluyver I intend to examine, evaluate, and break down his key points. The book provides a general view on how corporations govern themselves, and the internal and external forces that effect and constrain them. The biggest external force is of course the US Government and the variety of laws and regulations imposed upon corporations. Internally, they are managed by the CEO and board of directors along with a set group of committees and corporate guidelines.

Governance is usually delivered through an agreed constitution, through a complex web of customs and practices, underpinned by a shared system of ethics, to a range of stakeholders from the shareholder to the customer in that institution. Styles of governance vary depending on the nature and size of the body concerned. At one extreme is the rule-based style adopted by public sector bodies, which may be concerned with conformity rather than performance. At the other extreme are the churches and clubs where governance is based on trust. Most corporate bodies have an amalgam of both trust and rules in appropriate proportions. The Logic being that trust can only work with open governance.

Alongside this regulatory response in the United-States, in the United-Kingdom rules of good practice and principles for good corporate governance have emerged in the form of Reports and Codes (even before the Enron crisis occurs). Similarly, the international economic actors also codified rules and principles for a good corporate governance.

Taking a geographical perspective to the evolution of corporate governance and by extension, idea of the board of directors as a self-regulating social system. There has been three differing perspectives, the two tiered board, legislated compliance and the voluntary or ‘if not why not’ compliance. The reasons for this are

In recent years，with the failures, people in prominent organisations are going to be requested to consider the applicability of their corporate governance. Moreover, the ‘Enterprise and Regulatory Reform Act 2013’ allowed the shareholders in UK have a binding vote on executive compensations. Corporate governance is defined as the regulations which are aimed to control those responsible for administrating an organisation (Boddy, 2014:p99). The wholesome corporate governance has been established through the supervision of external market and the internal positive enterprise culture. It can influence the share price and raising capital costs of a business. The good quality of a firm’s corporate governance is determined by the power of

As of today, an international corporate governance model does not exist. Corporations are bound by the laws and regulations of a country and the shareholders’ expectations. Even countries with similar histories, customs, languages, and ethnicities such as the United Kingdom (“U.K.”) and the United States (“U.S.”) have different corporate governance standards (Monks & Minow, 468). While the U.K. has a separate code of corporate governance with guidelines, the U.S. incorporates their governance policies within their laws.

Corporate governance represents the structure associated with the management of activities at a firm in a manner that ensures the protection of the shareholders’ residual claims. Further, the concept elaborates the mechanism instituted at the organizational level to ensure that business operations conform to various legal, ethical, and social expectations. China represents one of the most dynamic and fast growing economies across the globe. The expansion of the Chinese market highlights the necessity for the adoption of business practices that reflect not only the national conditions but also international practices (Holmes & Wong, 2015). Issues concerning culture, laws, enforcement, and the constitution of boards in the Chinese environment should be reconsidered for China to sustain its momentum as one of the dominant emerging economies. The “Code of Corporate Governance for Listed Companies in China” provides the legal framework that underlines the structure approved for Chinese businesses (Holmes & Wong, 2015).

Corporate governance is a process or structure implemented in order to properly direct, manage and control the business in both non-moral and moral sense. Non-moral practice of effective corporate governance includes efficient strategic planning and decision making, appropriate resource allocation and hiring and managing productive workforce. Meanwhile in moral sense of effective governance the corporation has to achieve transparency, fairness and honesty between board of directors, management and other parties involved in business. http://www.uniassignment.com/essay-samples/accounting/what-is-good-corporate-governance-accounting-essay.php ). Poor corporate governance in terms of its non-moral sense can cause higher risk and lower return, while

Recently the globalization of financial sector, and banking markets involved many important issues regarding to corporate governance regulation for banking enterprises and this includes Changes in regulatory framework

Furthermore, each company has different objectives and seeks their own benefit. When they have in common, corporate governance practices, it influences the economy of a country, and therefore growth in their development. It because the investors or financial institutions abroad, will be more attracted to inject resources. Consequently, the company will access to better conditions in the international capital markets, being, ultimately, less exposed to the economic crisis.

Definitions of corporate governance are many. According to Organization for Economic Co-operation and Development (OECD), “Procedures and processes according to which an organization is directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization – such as the board, managers, shareholders and other stakeholders – and lays down the rules and procedures for decision-making.”(Reference)

Corporate governance can be defined as the process, customs, laws by which the affairs of a company are managed and controlled it also