Corporate Governance and Globalization

CORPORATE
GOVERNANCE AND
GLOBALIZATION

Table Of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Introduction of research companies.............................................................................................4
List of the research companies.....................................................................................................5
Financial crisis.............................................................................................................................5
UK as well as US response..........................................................................................................6
Impact of financial crisis..............................................................................................................6
Regulatory framework.................................................................................................................7
CONCLUSION................................................................................................................................9
Discuss how the integrity affecting the corporation....................................................................9
Identify main issues of the current debate on corporate governance and the necessity of the
development of new, more effective, corporate governance solutions........................................9
Recommendations, lesson learnt from the case study...............................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Snake oil salesmen is basically the individual who intentionally sells the fraudulent goods
to people or who himself is fraud or quack. When the directors of the organizations are not
directly involved in the financial matters then snakes oil salesmen gets the chance to cheat other
and organization and their main duty is to fool the people by selling defective goods. Snake
charmers are predominately the people who sell the fraudulent and defective goods and thus
misleads organization as well as market. Corporate governance is predominately the series as
well as system of practices, rules as well as processes through which organization are mainly
directed and controlled. The major responsibility as well as duty of corporate governance is to set
the effective code of practices for promoting ethical working in organization and to clarify the
rights as well as responsibility of management within an organization. In short, corporate
governance has been established to put a stop on all the fraudulent activities and to provide a
framework to all the organization for corporate disclosure. The main importance of corporate
governance is that it ensures the transparency as well as reliability for balancing economic
development. Corporate governance increases accountability of the company as well as helps to
avoid massive disasters prior of their occurring. Besides this, it helps the organizations to
perform their functions ethically and hence work towards the interest of stakeholders through
maintaining the full transparency. Corporate governance plays an important role within
organization and thus sustain the competitive advantage. The effective corporate governance
mainly ensures the corporate success as well as lower down capital cost. Corporate governance is
required for making organizations aware about the various standards as well as and to increase
their compliance to various code of practices in order to avoid any fraud or misleading. The code
of corporate governance generally sets out the various standards of good practices in terms of
development, remuneration, relationship with shareholders, accountability etc. Major principles
of this code are leadership, effectiveness, accountability and remuneration. These four principles
generally forms the pillar of each and every organization and makes the organizations
responsible towards their stakeholders. The main aim of this report is to study the financial crisis
as well as need of corporate governance within organization to maintain the economic balance as
well as to prevent collapse of the firms.
This report gives an overview of actors as well as players influencing corporate decisions,
duty of the directors, impact of snake oil salesmen in collapse of banking industry, weakness of

corporation structure, financial crisis in Lehman brothers, Washington, Mutual, Northern Rock,
Bear Sterns & Royal bank of Scotland, theory of the corporate scandals, theories to the political
theories, transaction cost theory, unjust enrichment theory, self-enrichment theory and agency
theory.
MAIN BODY
Introduction of research companies
Identify the actors name and the actions which influence the corporate decision that collapse
the corporations. Brief history of how the actors come into the picture.
A snake oil salesman is someone who knowingly sells fraudulent goods or who is himself
or herself a fraud, quack, charlatan, and the like. There are various people who are engaged in
doing fraudulent activities which has led to the downfall in corporations. Most of these
individuals are engaged in doing frauds in their financial statements. These frauds have increased
the responsibility of auditors which can keep a check on all the ill effects which is going in and
on company. Like for example the Collapse of Lehman Brothers, the key actors who were
engaged in this type of fall includes government. Everyone blamed US government decisions
which lets Lehman failed (Yermack, 2017). Its collapse also served as the catalyst for the
purchase of Merrill Lynch by Bank of America in an emergency deal that was also announced on
Sept. 15. In this Collapse company went bankrupt and solemnly blamed the inefficiency of
auditors in managing frauds which were going in and on. It has also been linked to great
recession financial crisis which happened in the year 2007-2008. Another scam which was being
noticed in the year 2008 was of Washington Mutual, it was largest saving bank holding company
in the United States, it went bankrupt in year 2008. In this collapse one of the most significant
actor was Kerry Killinger, after the crisis he stepped down as chief executive officer of company.
Key actors who were insufficient and weak was mainly board of directors.
Duty of directors – related with snake charmers
There are various duties and responsibilities of directors to stop snake charmers from
doing fraudulent activities. Like in the case of Lehman, it was director’s duty to make sure that
they are engaged in governing firm to their best interest and to shareholders. There personal
motive must not come in between governing organization. Directors needs to be loyal and take
care of all activities which are going in company. They can also hire auditor which can keep a
check upon snake charmers of firm and can help them in saving organization from collapsing.