U.s. Corporate Governance System

Corporate governance is a set of actions used to handle the relationship between stakeholders by determining and controlling the strategic direction and performance of the organization. Corporate governance major concern is making sure that the strategic decisions are effective and that it paves the way towards strategic competitiveness. (Hitt, Ireland, Hoskisson, 2017, p. 310). In today’s corporation, the primary objective of corporate governance is to align top-level manager’s and stakeholders interest. That is why corporate governance is involved when there is a conflict of interest between with the owners, managers, and members of the board of directors (Hitt, Ireland, Hoskisson, 2017, p. 310-311).

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.

In the corporate form of ownership, the shareholders are the owners of the firm. The shareholders elect the directors of the corporation, who in turn appoint the firm’s management. This separation of ownership from control in the corporate form of organization is what causes agency problems to exist. Management may act in its own or someone else’s best interests, rather than those of the shareholders. If such events

Corporate governance is based largely on trust – the trust, by the stakeholders, that revenues will be fairly shared, and that those directly involved in running the company are running it in an aboveboard, honest, and open manner, and that they represent the best

According to the Organization for Economic Cooperation and Development (OECD), corporate stakeholders have a very important role, not only within the business for the community as well. "Good corporate governance helps...to ensure that corporations take into account the interests of a wide range of constituencies, as well as the communities within which they operate, and that their boards are accountable to the company and the shareholders. This, in turn, helps to assure that corporations operate for the benefit of society as a whole" (1999).

Japanese management: how the western influence and the 1990s crises have modified management practices in Japan, and in Japanese companies broadly speaking?

In recent years the issue of corporate governance has become a keenly debated topic in international finance. In developed countries, some of the biggest corporate collapses in history have brought about a change in focus. No longer are governments and lawmakers trying to deregulate and reduce the controls and disclosure requirements of corporations. The deregulation boom has ended, as regulation comes back into the picture.

Japanese AAR figures. Although NPV and IRR methods directly maximizes shareholders wealth, in understanding Japanese corporate governance, we understand that the NPV and IRR method may not fit with the Japanese management decision making culture. Accordingly, the case mentions that Japanese managers are often less “numbers driven” than their “western” counterparts and would need to balance serving the interests of stakeholders (rather than shareholders only) as well looking after the company’s long term wealth.

The second problem is the defects in corporate governance of Japanese banks. First, because of the structure of bank ownership, few shareholders own the majority of the total shares, most shareholders have modest control over the management of banks. Second, shareholders lack of incentive so it is difficult for them to against managements’ decisions. Third, the internal and external audit was very limited.

This paper will raise the following research questions: What is the state-business relation in Japan? How was

This understanding is helpful for policy makers to evaluate the advantages and disadvantages of implementing a particular philosophy on their corporation laws and adopting a particular board model. This study starts with a brief review of the prior research on the corporate governance systems in a variety of different countries. It then analyzes the structures of German

For example, the European Commission (EU) provides particular governance such as increasing of shareholder’s rights and better discourse for enhancement of corporate governance in European Union (Aguilera & Cuervo-Cazurra, 2009).

Corporate governance has been a major issue for Japan and has undoubtedly affected the economic growth of the country. In 2012, what is considered commonplace in regards to corporate governance in many countries, including Asian countries, is not the norm in Japan. For example, in countries like India, China, and South Korea, companies are required to have at least one independent director. In New York, a firm must have a majority of independent members in their board of directors. According to a study in 2011, out of 1,668 Japanese firms only 34% had at least one independent director. (insert citation). According to Yuko Kawamoto of Waseda University, Japanese bosses argue that “similar rules in Japan would limit managers' freedom” (as stated in “Back to the Drawing Board,” 2012). Also in Japan, shareholders do not have any one to advocate for them because boardroom committees have no legal status (“Corporate Governance in Japan,” 2012). All of this, coupled with Japan’s culture of foreign exclusion, is a big problem for the country. By not paying attention to its competitors, especially in Asia, and not expanding the culture of their corporate boards, Japan is missing out on many opportunities to look beyond their borders and successfully grow their economy.

By expanding the spectrum of interested parties, the stakeholder theory stipulates that, a corporate entity invariably seeks to provide a balance between the interests of its diverse stakeholders in order to ensure that each interest constituency receives some degree of satisfaction (Abrams, 1951). The stakeholder theory is therefore appears better in explaining the role of corporate governance than the agency theory by highlighting the various constituents of a firm. Thus, creditors, customers, employees, banks, governments, and society are regarded as relevant stakeholders. Related to the above discussion, John and Senbet (1998) provide a comprehensive review of the stakeholders’ theory of corporate governance which points out the presence of many parties with competing interests in the operations of the firm. They also emphasize the role of non-market mechanisms such as the size of the board, committee structure as important to firm

From 1986 until now and more than 25 years from DOI MOI, the policy of multi-sector economy has implemented, Vietnamese enterprises have formed and developed very fast, very strong in Vietnam, widely available across the country and in all economic sectors. With the rapid growth in the number and scale of development, corporate governance (CG) becomes a factor attracting huge attention from the business and corporate law makers. Business environment is being improved leading to the corporate governance framework also builds complete. Vietnam’s CG has been recognized by the world is consistent with the requirements and principles but common CG activities in