Corporate Governance in a Globalizing World: An Analysis

This report delves into the realm of corporate governance and leadership within a globalizing context. It begins by summarizing and analyzing articles concerning the increasing presence of women in corporate leadership roles, particularly within the ASX200 companies in Australia. The report highlights the statistical rise in female representation on boards and the implications of this trend. Furthermore, it addresses challenges such as the role of social connections in board appointments and the potential exclusion of qualified individuals. The analysis extends to the application of organizational and institutional theories to understand the dynamics of corporate leadership, emphasizing the significance of diversity, ethical practices, and stakeholder influence. The report also discusses the importance of senior leadership and shareholders in organizational decision-making, along with recommendations for enhancing corporate governance and concludes by summarizing the main findings and recommendations.

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Governance in Globalizing World
Author’s Name
Institutional Affiliation
Course Name
Professor’s Name
City and State
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Governance in Globalizing World
Introduction
Corporate governance determines performance, productivity and efficiency of
organizations. The organizations with experienced and competent corporate leaders have a
higher chance of gaining a competitive advantage in both domestic and international markets.
Against the backdrop of diversity and female leadership, there has been significant attempt to
incorporate women into senior leadership of corporate organizations. It is believed that
organizations with diverse board structure are managed properly, and can achieve exemplary
performance. This paper, therefore, looks into corporate leadership, by summarizing two articles
and analyzing five articles. In addition, the paper will use organizational and institutional
theories to analyze issues raised in the two summarized articles.
Question 1 a)
ASX200 boards near 30pc gender target: AICD by Sally Patten
In summary, this article reports the dynamics of female corporate leadership in 200 best
companies in Australia. The women are joining the boards of companies in Australia, amid
concerns about the number of women in top corporate leadership. Statistically, the article
intimates that in 2017, only 25.4 per cent of women were on boards of 200 biggest companies in
Australia, but in 2018 the percentage shot to 28.5 percent. This was a three percent improvement,
which in all probability was a great improvement. This rise is an improvement the author
describes a sharp increase in the number of women in senior leadership.
Although, small companies according to the author are not making significant improvement at
the board level. However, this is a tremendous success in the senior leadership of women in
Australia’s biggest corporates. From this article it is becoming apparent that ASX200 companies
are trying their best to incorporate women into corporate leadership. It is a good gesture and
something to pride about especially at this time when people across the world are supporting
women empowerment and their inclusion in corporate leadership. Besides, this article is relevant
in the practice of corporate governance in organisations, because it underscores the fact that
women can also lead. It is also relevant owing to the fact that it addresses diversity in the

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corporate governance. Women are viewed as capable as men, and therefore this article is
pertinent because it draws people recognizing the contribution of women in corporate
governance.
Company boards are stacked with friends of friends so how can we expect change? By
Sherene Smith
The article discloses that the appointment to the board of directors or top leadership in the
organizations require social connections. The individuals who have networks with senior people
are likely to be appointed to senior leadership positions in corporates. Two-thirds of board
appointments in the largest 200 public companies in Australia were associated with social
connections. The author cites that the person to replace the ex-AMP chairwoman Catherine
Brenner would be got from possible a small group of people.
Brenner was working at Financial Services Royal Commission and resigned following
accusations of misleading legislators and other multiple scandals. The author reports more
resignations were expected at commonwealth bank following that of Brenner after learning that
the board of directors was made up of people in the same social circles. Further, the article
agrees that board diversity is improving. But, raises a concern that some genuine and qualified
people especially women are excluded due to lack of social connections.
This article is also relevant to the practice of corporate governance in organization, because it is
stresses challenges faced in achieving diversity. The corporate governance diversity within
organization it is supposed to be given to women who are qualified. However, citing the case of
Brenner, it appears that she must have been promoted to the chairwomanship of the Financial
Service Royal commission due to her social connections. Thus, the article seeks to address
challenges that come with diversifying corporate governance in organizations.
Question 1 b)
ASX200 boards near 30pc gender target: AICD by Sally Patten
Stakeholder Theory

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The appropriate theory for the above article is organizational theory. Theory addresses how to
identify structures or patterns to apply in solving problems within organization (Capper 2018
p.9). The patterns or structures with organization can be utilized to improve productivity and
efficiency in order to meet shareholders’ expectations. Based on the article it is reported that the
Australian largest companies are recruiting women into board or senior leadership positions to
diversify and improve management. The research by Post (2015 p.1154) informs female
leadership is associated with cohesion on larger and more functionally diverse teams and it is
linked to cooperative learning and participative communication. Cohesion among teams within
an organization is important; because it can improve productivity, enhance work flow and
efficiency. Hence, the organizational theory can be used to explain the above article in the sense
that it is informing how organization can leverage female leadership in organizations.
In the recent years, organizations have been considering how to incorporate female leadership
into their operations. It is by this that organizational theory informs the organizations on the
appropriate way to improve its structures and diversify it. A diversified organizational leadership
with female employees at the board level would benefit from good decision making and
relational skills (Hoobler, Lemmon, and Wayne 2014 p. 703). The good decisions and relational
skills will enhance effectiveness of teams in productivity. More importantly, women inclusion
into senior leadership is becoming an issue of urgency to most organizations. Organizations that
use the organizational theory are likely to be concerned the right pattern or structure they believe
can improve efficiency and productivity, which in turn increases profits.
Company boards are stacked with friends of friends so how can we expect change? By
Sherene Smith
Institutional Theory
Institutional theory of organizations is appropriate to this article, because it underscores
institutional changes. The institutional theory underscores that changes are important within
organizations, and raises the problems that need to look into when organizations go through
some changes (Cook, and Glass 2014 p.91). In this article, organizational diversity is becoming
an inevitable topic; however, there are problems that are emerging amid the changes. One of the
problems mentioned in the article is that company board of Commonwealth was filled by people

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with social connections. That is to say that even Financial Services Royal Commission
chairwoman, Brenner must have got the position through social connections. According to Peters
(2000 p.13) the institutional change requires that an organization looks into its values and
structures as well. That is why, the diversification of board of directors is addressing institutional
change, but it has to look into values. If ethical values like integrity are considered during hiring
or appointment of women to top leadership, the right women shall get top leadership positions
merit. Fundamentally, when implementing institutional change, the focus is to improve the
content of what institutions do or what they believe. For this reason, the institutional theory is
important to the article, for the fact that it informs the organizations the sense of implements
changes like diversity and inclusion of women in an ethical manner.
Question 2
In the article by Patten (2018) the major issue that came out is increased number of women in
Australia’s biggest 200 companies. This issue could be summed up as a remarkable rise of
women to corporate leadership. It is good news to hear that Australia is recognizing the ability of
women to lead and manage organizations. It is not just an achievement for women, but this is an
achievement for women empowerment, which both men and women support. Similarly, the
article by Smith (2018) also indicates that diversity is being made in the company boards. This is
something also to celebrate; however, the article is raising an important issue of nepotism
surrounding the emergence of women in the company boards. This is a critical issue that is
posing a challenge to appointment of women to top leadership. There are women who are
qualified to lead organization and make wise decisions necessary for organizational
management. Perhaps, the appointment of Chairwoman, Brenner cited by Smith (2018) to the top
leadership of Commonwealth Bank was due to social connections. All in all, the article by Smith
(2018) highlights the challenges like social connections denting efforts to promote more women
to senior leadership.
The article by Swan (2016) is bringing out comparison between experienced shareholders and
independent directors. Based on the article, the author is mooting an argument on whom between
the experienced shareholders and independent directors should make up the board structure.
According to Swan (2016) experienced shareholders can engage in swing trading, while

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independent directors usually do not have enough experience in a specific area. As a result,
experienced shareholders need to be considered in the board structure rather than independent
directors without specific experience in a particular field. Shareholders if made the board of
directors are likely to understand the price changes in the market, and this helps them run an
organization profitably. But, independent directors, despite being professional directors, they
seem not to have specific experience that may benefit the organization if they are board of
directors. This is due to their involvement in different businesses. Nonetheless, in the article by
Greber (2018) the issue of sacking the CEO, Elon Musk and privatizing Tesla is associated with
disappointment in failed senior leadership. A C.E.O, who is performing well and keeping the
organization afloat and profitable, is not likely to be sacked. Thus, the issue here is challenges
that senior organizational leaders face in case they fail to perform to expectations, especially of
shareholders. Clearly, Musk wanted to privatize Tesla, but the fact that the shareholders told him
not to do so, brings out the aspect of shareholders’ influence in decision making. Similarly, the
article by Frost (2018) is related to that by Greber (2018), because they both raise the concern of
bad management. Based on these articles when shareholders or organizational performance
dwindles, it is usually associated with bad leadership or management and in reaction the
shareholders are likely to demand for the sacking of the top managers.
Recommendations
I recommend that the organizations need to do background checks on job candidates for
managerial positions to avoid giving jobs to female leaders based on nepotism or social
connections in order to have effective corporate governance systems. Senior leaders in
organizations should prioritize consultation with shareholders before making decisions to
effectively improve corporate governance systems.
Conclusion
In summation, it has come out that women are taking up top positions in the organizational
management. It is a great achievement to have women occupy senior leadership positions to
work with male colleagues to steer corporate organizations in the right direction. For many years
corporate governance has been a reserve for male professionals, but that is changing owing to the
fact that board structure is getting egalitarian. However, as the push for women inclusion in the

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top organizational leadership gains momentum allegations of social connections are locking out
competent and qualified women. Women with social connections are likely to be appointed to sit
in the board of directors, rendering the appointment of some women to senior positions an act of
nepotism. Besides, the articles have intimated that the top leadership of every organization is
central. Due to that corporate governance requires that both male and female managers work
collaboratively to increase productivity, efficiency and performance of organizations.
References

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Cook, A. and Glass, C., 2014. Women and top leadership positions: Towards an institutional
analysis. Gender, Work & Organization, 21(1), pp.91-103.
Capper, C.A., 2018. Organizational Theory for Equity and Diversity: Leading Integrated,
Socially Just Education. Routledge.
Frost, James. APRA Chairman Wayne Byres say Banking Executive Pay is out of step and must
Change. Financial Review-Afri.com.
Greber, Jacob. 2018. Is Elon Musk Running Out of Time at Tesla? Financial Review-Afri.com.
Hoobler, J.M., Lemmon, G. and Wayne, S.J., 2014. Women’s managerial aspirations: An
organizational development perspective. Journal of Management, 40(3), pp.703-730.
Patten, Sally. 2018. ASX200 boards near 30pc gender target: AICD. Financial Review-Afri.com.
Peters, B.G., 2000. Institutional theory: Problems and prospects. pp. 1-18. Retrieved from:
https://www.ihs.ac.at/publications/pol/pw_69.pdf
Post, C., 2015. When is female leadership an advantage? Coordination requirements, team
cohesion, and team interaction norms. Journal of Organizational Behavior, 36(8),
pp.1153-1175.
Smith, Sherene. 2018. Company boards are stacked with friends of friends so how can we expect
change? PhD Student, RMIT University.
Swan, Peter. 2016. Experienced Shareholders better than Independent Directors for Business.
Professor of Finance, UNSW. The Conversation, the Academic Rigour, Journalistic Flair.