The importance of a global approach to regulating corporate governance, focusing (with examples) on the problems/benefits that t

The importance of a global approach to regulating corporate governance, focusing (with examples) on the problems/benefits that t Essay example
Masters
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Finance & Accounting
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THE IMPORTANCE OF A GLOBAL APPROACH TO REGULATING CORPORATE GOVERNANCE Table of Contents Table of Contents 2 Introduction 3 Corporate Governance 4 Agency Problems 6 Critical Review 9 Conclusion 11 References 13 Critically analyse the importance of a global approach to regulating corporate governance, focusing (with examples) on the problems/benefits that this may cause Multi-National Corporations…

Introduction

Hence, the ownership structure of the multinational corporations (MNCs) is also becoming increasingly complex because of more external financing methods being employed by them. Thus, the investors of a company who are involved in the process of providing funds for the MNCs form a particular group of stakeholders and they have their own specific interests in the companies. In order to address these additional interests of the investors the companies need to harmonise these with the other stakeholders’ interests to form a new organisation system and structure that brings together all these ambiguous objectives together. This type of new organisational system has been found to evolve in the 20th century and is termed as corporate governance (Herrigel, 2006). It can be argued that global approach is not required to work under the regulations set out in the corporate governance mechanism. However, in order to argue on such issue the agency problem should be considered that takes place within the organisational structure of a public company. Moreover, it is also required to evaluate that whether taking a global approach towards corporate governance can result in harmonising the various interest groups or not. ...
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