Convergence of Corporate Governance: Critical Review and Future Directions

By Toru Yoshikawa, Abdul Rasheed. 2009

234 citations recorded by the source corpus.

The ideal corporate governance may be institution- and firm-specific and an imposition of new practices or standards may not lead to intended policy or performance outcomes.Our review of the past literature suggests that increasing integration of product and capital markets is leading to changes in corporate governance around the world, but there is only limited evidence that such changes constitute convergence. Governance changes seem to be primarily attributable to the quest for greater efficiency in governance and enhanced legitimacy in capital markets. However, local forces such as institutional embeddedness and politics can hinder governance changes or create 'hybrid' practices. Despite the vigorous intellectual position of the proponents of convergence, there is only limited evidence to indicate that such convergence is actually occurring. Even when there is ostensible convergence, much of it is convergence in form rather than substance, and governance convergence is not a context-free phenomenon. Convergence in corporate governance across countries has been a subject of interest and controversy in a variety of disciplines. We attempt to address a number of related research questions: (1) what constitutes convergence? (2) what are the drivers that propel corporations in different nations towards convergence? (3) what are the major impediments that stand in the way of convergence? (4) what empirical evidence do we have to suggest that we are moving towards or away from convergence? and (5) what would be some productive avenues for further research on this topic? Convergence in corporate governance across countries has been a subject of interest and controversy in a variety of disciplines. We attempt to address a number of related research questions: (1) what constitutes convergence? (2) what are the drivers that propel corporations in different nations towards convergence? (3) what are the major impediments that stand in the way of convergence? (4) what empirical evidence do we have to suggest that we are moving towards or away from convergence? and (5) what would be some productive avenues for further research on this topic? Despite the vigorous intellectual position of the proponents of convergence, there is only limited evidence to indicate that such convergence is actually occurring. Even when there is ostensible convergence, much of it is convergence in form rather than substance, and governance convergence is not a context-free phenomenon. Our review of the past literature suggests that increasing integration of product and capital markets is leading to changes in corporate governance around the world, but there is only limited evidence that such changes constitute convergence. Governance changes seem to be primarily attributable to the quest for greater efficiency in governance and enhanced legitimacy in capital markets. However, local forces such as institutional embeddedness and politics can hinder governance changes or create 'hybrid' practices. The ideal corporate governance may be institution- and firm-specific and an imposition of new practices or standards may not lead to intended policy or performance outcomes.

Subfields: Accounting, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/4883ae7e5660e14db24c1b53c8d89fdd6a6e9e8c

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Citations in the corpus

Comparative and International Corporate Governance (2010, background): “…the firm should be vested in managers, and these should take into account stakeholders only to the extent that long-term shareholder value is created thereby—see debates in Gamble and Kelly (2001), Letza, Sun, and Kirkbride (2004), O’Sullivan (2003), Vinten (2001), and Yoshikawa and Rasheed (2009).”
Corporate Boards, Audit Committees, and Earnings Management: Pre- and Post-SOX Evidence (2010, unknown): “The results from our study can provide input to the recent debate on the need for greater government regulation of corporate boards and whether there is a need for uniform best practices of corporate governance around the world (Yoshikawa and Rasheed, 2009).”
Do Shareholders or Stakeholders Appropriate the Rents from Corporate Diversification? The Influence of Ownership Structure (2010, background): “It is perhaps likely that corporate governance “hybrids” incorporating elements of the U.S. or U.K. model into local practices will increasingly be seen as radical institutional change progresses (Aguilera & Jackson, 2003; Yoshikawa & Rasheed, 2009).”
Corporate Boards and Ownership Structure as Antecedents of Corporate Governance Disclosure in Saudi Arabian Publicly Listed Corporations (2018, background): “Keywords: corporate governance, board and ownership structures, voluntary disclosure regime, multitheory, Saudi Arabia”
National Governance System, Corporate Ownership, and Roles of Outside Directors: A Corporate Governance Bundle Perspective (2014, unknown): “Another interesting direction for future research is to predict the potential convergence of governance models across countries driven by the development of national governance systems and the change in dominant ownership structures (Yoshikawa & Rasheed, 2009).”
Executive Compensation and Corporate Fraud in China (2014, unknown): “As a result, an examination of the fraud and corporate governance issues in the Chinese context also helps to shed light on the discussion of convergence of corporate governance mechanisms in the world (Yoshikawa and Rasheet 2009).”