Convergence of Corporate Governance

qwertyuiopasdfghjklzxcvbn
mqwertyuiopasdfghjklzxcvb
nmqwertyuiopasdfghjklzxcv
bnmqwertyuiopasdfghjklzx
cvbnmqwertyuiopasdfghjkl
zxcvbnmqwertyuiopasdfghj
klzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdf
ghjklzxcvbnmqwertyuiopas
dfghjklzxcvbnmqwertyuiop
asdfghjklzxcvbnmqwertyuio
pasdfghjklzxcvbnmqwertyu
iopasdfghjklzxcvbnmqwerty
uiopasdfghjklzxcvbnmqwer
tyuiopasdfghjklzxcvbnmqw
ertyuiopasdfghjklzxcvbnmq
Critical Review on convergence of
corporate governance

CONVERGENCE OF CG SYSTEM 1
Introduction
Aguilera, Judge and Terjesen, (2018), stated that corporate governance is the procedures which
include rules, guidelines, and structure with which the company control and direct the business
operations and manage the interest of the stakeholders of the company. According to Salvioni,
Franzoni, Gennari and Cassano, (2018), convergence of CG refers to growing isomorphism in
the practices of corporate governance. Corporate governance improves the organization’s
stakeholder’s values by the process of accountability of leaders and board members. The
company keeps corporate governance practices towards achieving the goal of the company and
meet the expectations of the company’s powerful stakeholders. As it helps in decreasing the
conflict of and reduces the issues between agent and principle into the organization. Good
corporate governance is the key aspect of many organizations’ success. Since the past two years
many researchers focusing on the debate of the existence of convergence of CG system. Some
researcher founded the existence of convergence, in contrast, some other claims that there is no
existence of convergence of governance practices.
This report will cover the notion of corporate governance and provide an evaluation of
convergence from a different perspective and link them factors that drive and impediment the
convergence of CG system.
Critical review on Convergence of corporate governance
Part 1: Existence of corporate governance
According to Jacoby, (2018), from past some years the significance of corporate governance
arises due to the separation of management and ownership of the interest. The interest of the

CONVERGENCE OF CG SYSTEM 2
directors and manager reflecting each other and arise the many issues. This resulting
disagreement and miscommunication between the board members and shareholders of the
company. Although there is no specific meaning of CG it can be assessed from a different
perspective. With the Hussain, Rigoni, and Orij, (2018), point of view CG is the process of
allocation of the capital resources, ownership, remuneration schemes, the board of directors, all
the committees and pressure of the other stakeholders such as investors and suppliers also
competition environment. Overall governance defines how companies lead directors to make a
decision in respect of such matters. It is the way with which the company’s suppliers assure that
they are getting the return on investment or not. While assessing the convergence of corporate
governance Davo, Martínez and Rodríguez-Carrasco, (2019) comprehensively stated, with
regards to corporate administration, union alludes to expanding isomorphism in the
administration practices of open organizations from various nations. As indicated by as of late,
there has been significant debate about both the attractive quality and certainty of combination in
the administration practices of open enterprises.
Drobetz and Momtaz, (2019), Argues that there is a normative consensus which persuading the
corporate guidelines towards the shareholder’ value maximization. In Addition, they also argue
that shareholders maintain the supportive and political consensus in the organizational favour. In
contrast Williams and Conley, (2005) focused on the difficulties while the convergence of CG.
The research of Mario Krenn (2016) studied that changing pattern of world economy forces
economic institutions to adopt the foreign laws and guidelines in order to fit in the local market.
As a result, growing globalization will lead to hybridization instead of convergence.
The trend of carrying corporate governance and ethical framework is growing day by day every
organization has to follow and maintain high standards in order to maintain a safe work

CONVERGENCE OF CG SYSTEM 3
environment and meet the legal expectations of the society. This trend is growing worldwide and
many countries or their government provides a guideline to carry the corporation government
and provide disclosure about corporate governance. In the disclosure, companies have to show
that they maintain legal obligation and deliver sustainable environment to the society and
communities. As Yoshikawa and Rasheed, (2009) stated that convergence is when two
organizations or countries adopt the same corporate government laws and guidelines. The
research conducted in supporting the statement that it exists as many organizations and countries
having similar policies, for instance, most of the companies are having a policy of corruption and
bribery majority of largest companies support the engagement of its stakeholder while decision
making. In contrast Sarens and Abdolmohammadi, (2011) suggest that these policies vary
according to their actual occurrence of corrupt practice across the countries and claim that there
is no convergence.
When existing establishments do not have the adaptability to react without general change and
legal boundaries limit the limit with regards to general institutional change, an option would be
contracts. Consequently, in any examination of assembly it is imperative to be clear about what
sort of union the report talking about.
Any discussion about convergence is useless until it can be specified that what the objects
involving in the group are converging to For example, Japanese and American administration is
combining could mean various things. In the first place, it could imply that American
administration practices are ending up progressively like Japanese practice. 2nd, it could imply
that Japanese administration is ending up increasingly like American administration. 3rd, it can
imply that both are joining towards the centre between them. At last, it could likewise imply that