Cultural Influence in the Practice of Corporate Governance in Emerging Markets

Abstract

Corporate governance seeks to ensure a fair return on the investment and it also establishes incentives and procedures that meet the interests of shareholders while respecting other stakeholders’ interests in the organization. Corporate governance has become one of the hottest topics of discussion in the circle of regulators, practitioners and academic in the aftermath of recent financial crisis. The financial crisis pint points the lack of corporate governance practice and that many institutions have taken heed to ensure compliance of corporate governance to win back the confidence of investors and regulators. Well-developed theories like agency theory, stewardship theory, hegemony theory and transaction cost theory could be used to understand the concept of corporate governance. The aims of this research are to anlayse the concept of corporate governance and see the level of adherence to corporate governance in emerging economies. The research also endeavors to link the cultural influence in the adoption of corporate governance. As there are only limited researches so far on the corporate governance and related issues in emerging markets, this research would contribute to the existing knowledge by filling the gap on corporate governance in emerging markets.