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Corporate Governance Impact Of Globilisation On Corporate Governance

2411 words - 10 pages

THE IMPACT OF GLOBALISATION ON COPRORATE GOVERNANCE AND SOCIAL RESPONSIBILITYIt is now difficult to read a newspaper or a book, watch the television, surf the Internet, or participate in a demonstration without coming across references to how 'globalization' is affecting our lives. Globalisation is a complex phenomenon, with economic, political and cultural dimensions. At the centre are economic pressures stemming from trade liberalization and increased international competition driven by technological change and growth of the knowledge economy. Globalization enters the ways in which the content of social policy and the distribution of welfare are shaped by: governmental and nongovernmental organizations responding not only to domestic issues and sources of pressure but also to circumstances, events, and developments in other countries; the policies of foreign governments, international organizations, and financial institutions; and the decisions and activities of overseas headquarters. Impact of globalization on social policies nowadays all countries are exposed to economic pressures from globalization that has had implications for social policy. One of the crucial challenges facing many developing and transitional economies is balancing the benefits of globalisation with the risks and costs."Globalization can be described as a process by which the people of the world are unified into a single society. This process is a combination of economic, technological, socio-cultural and political forces". (Sheila L, 2004, p. 126)And during the times of globalization to take the maximum economic benefit for themselves the principals (owners) of MNC's have ignored the values of good Corporate Governance & Social Responsibilities. They act in the guise of the trust of Shareholder & Stockholders for their personal benefits because there is lack of transparency, accountability & compliance in financial reporting to regulations. Thus Corporate Governance & Social Responsibility has evolved into an important institute within recent years during the time of globalization because of the highly visible corrupt and unethical practices of large and global companies such as Enron, WorldCom, HIH and Parmalat, the Italian dairy conglomerate & in latest was Satyam. These scandals had left stakeholders and governments in a disorientated state. All this is effecting in increasing Corporate Governance and social responsibility. Multi National Companies are large and principal (owners) of MNC's they impact on society so they should be accountable not only to their shareholders but other stakeholders as well. Linked to stakeholder theory is the idea of Corporate Governance. ASX Corporate governance guideline recognises the legitimate interests of the stakeholders by handling all the legal obligations being created due to different arising circumstances in the company. For example: if a stakeholders has issued a company's share, knowing the wants of the...

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