Proposed Research Paper in Corporate Governance


Corporate governance in an organization is of crucial significancefor its role in facilitating the execution of operations in acompany. It focuses on the need to create an equilibrium betweeninterests of the organization’s stakeholders such likeshareholders, the managers, financiers, suppliers, community and thegovernment. Further, the concept of corporate governance reiteratesthe need to come up with strategies that lead to the achievement oforganizational objectives as it incorporates each sphere ofmanagement from actions enacted, internal control mechanismsresulting in adequate performance. The paper will elaborate variousaspects of corporate governance with a focus on jurisdiction andtheir corresponding laws and regulations being highlighted. Further,consideration will be made on the identification and analysis ofsocial and economic forces that drive corporate governance reformsconcerning the selected jurisdictions. Additionally, the discussionwill elaborate on reforms that have been proposed regarding corporategovernance within the scope of the selected jurisdiction. Finally,the discussion will revolve around a comparison of the localresponses to the international corporate governance discourse.

Keywords: corporate governance, law, regulation, jurisdiction

Concepts andStructures Systems of Corporate Governance

Corporate governance is a broad subject that encompasses variousconcepts. The concepts of corporate governance are honesty,responsibility, judgment, independence, fairness, transparency,integrity, reputation and accountability. Honesty in companies is ofsignificance since it reiterates the need to adopt high moral values.Firms have the mandate of ensuring that the conduct their activitiesin an honest manner to avoid the possibility of development ofmistrust among the stakeholders (Jehiel, 2014). Directors have themandate of ensuring that they perform company activities in ways thatuphold the highest degree of honesty. The concept of independencereiterates the need for directors to act in a sovereign manner. Theymust ensure that they are free from any matters that are likely toresult in a conflict of interest. Directors perceived to be havingvested interest in company affairs should be allowed to step asidesince it has an adverse impact on their ability to execute the tasksassigned to them. Corporate governance is based on fairness. Thedirectors working in coordination with the management must ensurethat they exhibit fairness in the manner in which operations areconducted in the company. Respect for the rights and views of eachindividual at the organization should be maintained. The board ofdirectors must not be seen to be biased towards others in theorganization. Responsibility is the other concept of corporategovernance that is practiced. Organizations have the mandate ofclearly defining roles and responsibilities for everyone working inthe company. Through the adoption of the concept, it would bepossible to track activities within the organization and credit goodwork while finding solutions to areas that could have failed.Integrity is the other vital aspect of corporate governance thatcompanies are expected to adhere to (Tricker, 2015). It reiteratesthe need to accede to the existing moral code of conduct. Further,integrity is accompanied by the need for employees within the companyto perform their duties with the highest level of professionalism.Any actions undertaken by the firm must not be shrouded in doubt. Judgment remains to be the other essential aspect of corporategovernance (Tricker, 2015). It entails the issue of decisions made bythe company. It is critical that decisions made are in the interestof the organization and stakeholders. The issue of judgmentemphasizes the need for directors to evaluate the decisions carefullythey are about to make and ascertain the fact that they would bring apositive outcome to the organization. Transparency is another conceptof corporate governance (Tricker, 2015). It focuses on issues such asdisclosure. It is essential for directors to exercise transparency inthe manner in which they conduct the affairs of the organization.Information should not be concealed from others. Activities carriedout in the firm must be well-known to the stakeholders since it couldbe an issue of significance to the operational activities of thecompany. Corporate governance is about directors being accountablefor all the actions that are undertaken by the company (Tricker,2015). Accountability is essential since it enables the directors tobe held responsible for actions and decisions that are made at theorganization. Accountability is of critical significance since itallows for checks and balances in the organization. Finally, thereputation of the organization is of fundamental importance regardinghow a business conducts its activities. Corporate governance focuseson the need for directors and stakeholders involved in ensuring thatthe organization has a good image to the public.

Theories of Regulation

Theories of regulation comprise two traditions. The public interesttheory of regulation is the first aspect. The argument assumes thatthe regulators have enough information and enforcement capabilitiesto promote the public interests efficiently. The governors areconsidered to be benevolent, and their goal is to pursue the publicinterest. Further, it can be described as the best possibleallocation of individual and group goods and services in apopulation. The fundamentals of the public theories of regulation arethe prevalence of market failure, the choice of an efficientregulatory institution, the assumption of a benevolent regulator andactive political process. Market failure is defined as an instancewhere scarce resources are put to the utilization of the highestvalue. The types of market failure are imperfect competition whichcauses the prices to deviate from the average costs, unstablemarkets, missing markets implying demand for socially valuableproducts and services and finally, undesirable market results. Thepublic interest theories of regulation have faced criticism asincomplete. The theories don’t indicate how a certain view on thepublic interest translates into legislative actions aimed to maximizeeconomic welfare. It also doesn’t appear to be able to makepredictions that can be tested empirically in economic science andfacts are observed social reality hence not well accounted for by it(Den, 2012).

The second tradition is called private interest theories ofregulation. The theory has various assumptions. First, the regulatorsdo not possess adequate information regarding demand, cost, qualityand other aspects of firm behavior. Therefore, they can only enhancethe public interest when controlling companies and societalactivities imperfectly. Further, monitoring, enforcement, andinformation costs apply to other economic agents such as consumersand legislators. Moreover, the economic agents are perceived tofollow their interests rather than the public’s interest. Thediversions of the economic agents’ objectives and costs involved inthe interaction among them may cause some of them to chase theirinterests. The private interest theories of regulation have beencontrolled from different angles. First, the core of the argumentsthat private interests translates into transfers in the politicalmarket has been criticized. Secondly, empirical research invalidatesthe hypothesis that regulation enhances self-interest mostly.Further, the theories are termed as incomplete, and the assumptionsof the Chicago theories of regulation have been criticized (Den,2012).

Economics &amp CG

Corporate governance is the system of processes, practices, andrules that control and direct a company. It’s a particular methodfor regulating risk in corporate activities, therefore, helping thefirm evade disasters, scandals and subsequent losses to theinvestors, society, and staff. It has become an essential instrumentfor comprehending, questioning and refining some primary economicsystems. Corporate governance is central to most global economicchallenges such as finance and money, free market economics, equalityand discrimination, sustainability, privatization vs. nationalizationand the regulation of the internet. Further, corporate governancedetermines how governments reconcile national economic needs withglobal responsibility needs and also dictate the extent and waysthrough which organizations minimize tax obligations. Conclusively,corporate governance balances departmental priorities to staff,shareholders, and customers as well as adjusting the reward andemployment guidelines between directors and regular staff (Tricker,2015).

Designing Law and Regulations for Corporate Governance.

The corporate governance framework comprises of the CG structures,principles, policies and practices that help corporations meetmanagement expectations of financial institutions and the SecurityExchange Commission. Therefore, in designing laws and regulations forcorporate governance, various factors are considered. First, ethicalculture is a core principle that helps a corporation nurture highvalues and reinforces the moral principles that are the basis of afirm’s reputation and success. The moral values extension intoevery segment of the corporation operations and business activitiesis essential for maximizing shareholder value. Second, accountabilityis crucial for effective corporate governance. The boards,committees, and management, should have clearly defined duties, andthey should be committed to constructive shareholder engagement, fulldisclosure, and financial reporting. In corporate reporting, rulesshould be developed that ensure the independence of and integrity ofthe reports. Disclosure to the shareholders should be regulated toensure that the information is balanced and timely. Further, theboard should be structured in a manner that adds value to thecompany. The board must be of the recommended size, and skills toenable it discharge its duties efficiently. The rules surroundingcorporate governance should ensure that the board is focused onimproving the company’s policies and practices while safeguardingthe interests of the shareholders. The board should also beindependent of the management for it to be able to work efficiently.The laws and regulations should contain a listed entity that canrecognize and mitigate risk and respect the rights of securityholders by giving them appropriate information to enable them toexercise those rights adequately. Finally, a listed entity in therules and regulations should be provided to ensure the firm attracts,retains and motivates quality senior directors (OECD, 2015).

ProjectObjectives and Long-term Impact

  • To highlight the laws and regulations related to corporate governance

  • To identify and analyze social and economic forces that drive corporate governance in the selected jurisdiction.

  • To illustrate significant corporate governance reform proposals concerning rationales, implementation effects, and future direction.

  • To compare the local responses to the concept of international corporate governance discourse.


The analysis of the concept of corporate governance is instrumentalin facilitating the comprehension of the issue. The research isrelevant considering the continued growth of investment activitiesacross the globe. The comprehension of the dynamics of corporategovernance will be instrumental in providing a broader perspective onthe operations of companies and their compliance with the establishedlaws and regulations within the selected jurisdictions.

Backgroundof Research

The issue of corporate governance continues to draw interest fromdifferent scholars across the globe. The emphasis of the research hasbeen the understanding various aspects of corporate governance withsome scholars highlighting the issues of good and bad governance. Itis essential to consider that organization that has failed to conducttheir affairs within the established laws have ended up exhibitingbad governance. Various researchers have focused on highlighting theadverse effects of bad governance with issues such as reliability ofthe company, integrity and the obligation to the stakeholders beingpointed out. Similarly, scholars have reiterated the need foradoption of good corporate governance for the benefits that it isassociated with (Siems, &amp Alvarez-Macotela, 2016). However, forthis discussion, it would be essential to confine the research toaspects highlighted in the objectives section. Notably, issuesincluding laws and regulations, social and economic forces, reformproposals and local responses as regards to corporate governance willbe discussed.

ResearchPlan and Methodology

The research will entail a review of the literature regarding theissue of corporate governance. Scholarly articles and journalsexplaining the concept of corporate governance will be employed togain a broader overview on the issue of corporate governance.Further, in possible scenarios, case studies will be adopted to helpillustrate the topic in greater detail. Emphasis is on highlightingthe various aspects of corporate governance that have beenidentified. An analysis of the findings will be conductedparticularly concerning the established references that have beenused in generating the literature review.

Identify and Analyze Social and Economic Forces driving CorporateGovernance

The aspect of corporate governance illustrates the framework ofprocesses, rules, systems, and relationships within which authorityis controlled in an organization (Tricker, 2015). Corporategovernance identifies mechanisms allowing the firm’s shareholdersto engage in decision-making and guarantees that the managementoperates efficiently. Good corporate governance enhances investorconfidence and improves economic efficiency which is essential to theability of entities listed on the securities exchange to compete forcapital. Various social and economic factors drive corporategovernance. It initially focused on the shareholders’ interests.However, recently companies have a social obligation towards a widerrange of stakeholders and the society they are operating in (Lowry &ampDignam, 2012).

Social factors

One factor that is essential in driving corporate governance is thecorporates social responsibility (OECD, 2004). Every corporate has aduty to be aware and protect the interests that the society is takingin the firm. A company’s primary goal is to generate profits andsafeguard the interests of the shareholders/investors, however, theyshould also have the motive to take initiative for the welfare of thesociety, and its activities should be performed within the frameworkof environmental standards. Also, a company should have a corporatesocial responsibility committee that generates and recommendspolicies indicating the company’s activities towards the communitythey are operating in. The company should also set aside a percentageof the net profit collected and spend it according to the policiesgenerated (Khan et al., 2013). The local area is vital towards thesuccess of a company especially the small emerging firms and also tothe big corporations and therefore, they should be given preference.Typical activities done by businesses in accomplishing theircorporate social responsibility include providing safety classes forchildren in the neighborhood, giving financial aid to needy familiesand paying college fees for them, providing employment to people fromthe local area and those with disabilities, and protecting theenvironment. The society’s social and cultural factors canpromote/hinder an effective corporate governance of an organization.

The board of directors is one of the primary entities of corporategovernance and it’s the major driving force of it. Its performancehas implications on the organization`s performance and operations.The board of directors is appointed by shareholders via thenominating committee to oversee managerial functions. It has a dutyof ensuring that investments are conducted effectively with focus ongenerating desirable outcomes, making it a controlling entity.Further, other functions of the board include corporateaccountability, reviewing, recommending and approving strategicplans. Independence of the board will ensure that it works withoutbias and for the greater good of the company. The board has aresponsibility to generate an environment enhancing governance,ethical behavior and transparency within the organization. They alsohire senior level management, do compensation and succession planning(OECD, 2004). However, the board performance should be reviewed fromtime to time through setting up metrics that measure its performance. Reexamination and evaluation of corporate governance practices canaid improve the board’s performance. Moreover, the relationshipbetween the management and the board will ensure that valid andreliable reports are delivered to the board hence facilitatingappropriate board-level decisions regarding corporate governance. Inconclusion, other approaches need be considered while focusing onsocial responsibility when designing the outline for corporategovernance (OECD, 2004).

Business ethics in a society in which a company operates drives itscorporate governance (OECD, 2004). Business ethics are standards,values or a set of professional conduct that govern the behavior andactions of an individual in an organization. Various models ofcorporate governance identified are social responsibility andmaximization of shareholders value. The model based on socialresponsibility is in cohesion with humanity. The natural law ethicaltheory provides an outline that is used in dealing with morality. Itserves to guide individuals responsible in governance while providinga moral critique of the existing laws and the practices relating tothe issue. A debate over whether corporation managers should servethe interests of the stakeholders including employees, customers,community, and the shareholders or just serve the interests ofshareholders is at its core in corporate governance. The natural lawpositions the primacy of ethics over economics, politics, and law.Therefore, depending on the model an organization chooses to embracethe corporate governance will vary from one organization to theother. In conclusion, business ethics are critical in drivingcorporate governance and social responsibility is best for anorganization as it takes into consideration the interests of allstakeholders (Tricker, 2015).

Economic Factors

Macroeconomic policies drive corporate governance (OECD, 2014). Theyare a set of government regulations developed to control indicatorsof the economy including money supply, interest rates, unemploymentrate and national income among others. The fiscal and monetarycomprise of the regulatory macroeconomic policies. In a fiscalpolicy, government adopts changes in the public expenditure tostimulate growth. The monetary policy highlights change in moneysupply and parameters they affect. Trade and finance influence theoutcomes of corporate governance. An open economy makes it difficultto sustain the insider corporate governance model of an organization.In a case study done in the U.S and UK, variations in theinterdependent aspects of the macro economy policy in the twocountries combined with self-regulatory ethics allowed firmsinvestors to refocus the rules on market levels on shareholders.Countries like France and Germany have core corporate governancesystems operate with different financing systems making them lesssusceptible to immediate change. In conclusion, global economicconditions push shareholder-based corporate governance model. If theconditions persist, governments will lose power regarding the choiceof the corporate governance system.

Another key factor that drives corporate governance is thecompetition in the product and factor markets. Factor markets aredifferent from the regular markets such that in the latter firms selland households buy but in factor markets homes sell and organizationsbuy. Land, labor, capital and entrepreneurship are purchased and soldin factor markets. Derived demand drives the markets and supplieshence an organization corporate governance is determined its abilityto make profits and consider the interests of all stakeholders.Product market competition a company faces is related to itscorporate governance. Product market competition can be measuredusing the Herfindahl incex. It measures the level of competitionamong organizations in an industry or by using an industry-adjustedprice cost margin. Firms with little market power or those incompetitive industries tend to possess weak corporate governancestructures. Further, the quality of corporate governance has asubstantial effect on performance only if there is low product marketcompetition. In conclusion, well-governed firms earn no significantlyhigher profits than poorly governed organizations under significantproduct market competition. However, competition still plays acrucial role in corporate governance systems as well regulatedcompanies than weak firms in a less competitive environment (Chou etal., 2011).

Economic growth of a country is a vital factor in driving corporategovernance (Andrei, 1997). Economic uncertainties have expandedpeople’s awareness about the influence companies have on theirdaily lives and politics. Governments should ensure high integrityoversight of business activity to build resilient and robusteconomies. A country’s economy and a company’s stewardship arelinked, and managers have recognized that good corporate governanceis less costly than the repercussions for bad management. Japan in2014 enacted a stewardship code with a corporate governance code fromTokyo Stock Exchange with the aim of attracting investors whileincreasing the economy. Therefore, the economic state of a countrydictates the corporate governance model to be used, and it drives itafter implementation.

Applicationof the Concept of Corporate Governance

The concept of corporate governance has found considerable use inorganizations. It is imperative to acknowledge the fact thatcorporate governance identifies the need to design systems,structures, procedures while at the same time taking transparentdecisions on potential ways of enhancing the organizational value andpromoting accountability. The application of corporate governancelies within the identified core values with consideration being madebased on its jurisdiction.

Corporate governance has been adopted within organizations with theultimate goal of promoting accountability in the execution ofbusiness activities. The shareholders of the organization demand thatoperations conducted by the firm should be accounted for andindividuals taking such actions must be held responsible for thesame. However, the need to be accountable should not only be apersonal initiative among the directors of the organization but itought to be in response to the established laws and regulationsgoverning the operations of corporate organizations. The economic,regulatory agencies that have been established emphasize the need fordirectors to be accountable for all activities that are conductedwithin the organization. The regulatory agencies have laid down duemeasures to deal with cases of non-compliance especially in caseswhere the firms end up closing down due to the inability to executetheir mandate. For example, a proposal to establish the FinancialReporting Council would be instrumental in overseeing and regulatingthe affairs of the accounting profession (FSTB, 2005). Through thesame, activities conducted within the organization will be accountedfor with any irregularities drawing concern on the entire issue. Thecouncil draws from among others Hong Kong Exchanges and ClearingLimited, Securities, and Futures Commission and Hong Kong Instituteof Certified Public Accountants.

Corporate governance has the implication of proper management of theorganizational affairs with transparency, diligence, andresponsibility to maximize the wealth of shareholders. The focus ofcorporate governance is to design systems, procedures, processes andstructures that would aim at improving the financial performance ofthe organization. Through the adoption of such an approach, thechances are that the shareholder value within the company would beincreased. The decisions made are in line with the established lawsand regulations within a given jurisdiction. Decisions made must beconsistent with the identified laws and regulations. The Securitiesand Futures Commission has the mandate of developing policies thatseek to enhance the standards of operation of corporate governancewhile addressing the emerging issues (SFC, 2005). The directors of agiven organization are mandated to ensure that the decisions theymade are in alignment with the recommendations of the SFC. Despitethe zeal of corporate institutions of making profits, considerationshould be made to the fact that there are laws that govern theoverall running of affairs within the firm. Notable laws determinedby the SFC include the listing procedures which are imperative in theenhancement of shareholder value because of the benefits that comewith the same. However, as the directors proceed to introduce andimplement the laws, caution must be taken to ensure that consistencyis maintained with the existing regulations. Through the same, thecompany is protected from possible hindrances to their operations fornon-compliance with the established regulations. The identifiedregulatory structures have a significant role to play in ensuringthat there is sustainability in the running of affairs.

Further, corporate governance has been applied in organizations toensure that activities conducted within the organization are ethical.The leaders within the organization within the organization have themandate of ensuring that the organization develops a company culturethat seeks to integrate ethical decisions with the principles ofcorporate governance. Reforms have been presented that aim atimproving transparency when it comes to financial reporting. It hasbeen identified that cases of corruption and embezzlement of fundsare rampant and being perpetuated through failure to disclose theexact dealings of the organization. However, those engaging in suchmalpractices do so for lack of regard to the ethical standards. Theinability to inculcate a culture of ethical behavior has led toincreased cases of the financial malpractices. However, corporategovernance has been able to address the issue courtesy of theprinciples of its operations. Directors who take the differentleadership positions in firms have been selected not only on meritbut the ability to conduct themselves with integrity. The soundapplication of ideas of corporate governance allows for eliminationof possibilities of failure to attain ethical considerations when itcomes to execution of tasks within the firm. Different organizationshave failed to progress because of inability to operate in an ethicalmanner. Previously, corporate giants have encountered a downfall forlack of application of sound corporate governance. Apart from theadoption of a culture of corporate governance, some laws govern theexecution of operations within the organization. Through the same,firms have failed to attain their full potential.

MajorCorporate Governance Reform Proposals and Schemes in the SelectJurisdictions

The acknowledgment of the fundamental role of corporate governance inthe running of affairs within an organization has seen reforms,proposals and schemes being introduced to enhance the concept. TheFinancial Services and the Treasury Bureau (2005) has proposed theintroduction of the statutory body that would be called the FinancialReporting Council that would be instrumental in overseeing the AuditInvestigation Board and Financial Reporting Review Committees. Theproposal is presented at a time when there is a need for moreregulation in the running of affairs within firms. Corporategovernance is operated within the auspice of observing theestablished laws. Financial matters relating to the givenorganization need to be conducted in ways that do not violate anylaws. The proposal will see to it that firms exercise their financialactivities in a manner that are consistent with the regulations thathave been set up by the identified agencies. It is imperative toconsider that such measures aim at improving reforms as regards tothe concept of corporate governance.

In light of the same issue, considerations are being made to see toit that individuals comprising the Financial Reporting Council arelay persons meaning that they would be non-accountants (FSTB, 2005).The proposal is essential for its ability to enhance transparencysince it alienates the concept of conflict of interest regarding theprinciple of accountability in corporate governance. Previously,individuals forming part of the financial regulatory agencies havebeen found to have a conflict of interest especially when matters ofaccountability arise. It has been difficult to implement reformsbecause of lack of impartiality among the individuals forming part ofthe council. However, the introduction of the reform will beinstrumental in improving corporate governance.

A proposal was also made on listing matters where it was suggestedthat the activity would be conducted by the Exchange’s ListingDivision and the new Adjudication Division established (HKEx, 2005).The reforms proposed by the identified government structures areinstrumental in seeing to it that organizations run activities inline with the modern framework of government structures. The dynamicnature of corporate governance structures negates the need to developa framework that would be instrumental in seeing to it that firmsconduct their activities in ways that are consistent with the currenteconomic and financial laws. Through the same, it would be possiblefor companies operating within the jurisdiction of the establishedregulatory agencies to maximize wealth for the shareholders whileadhering to the established structures. The proposals introduced seekto adapt to the developments witnessed when it comes to the conceptof corporate governance. Further, it was essential to see to it thatthere is enhanced regulation in the financial operations of firms.

The Hong Kong Exchanges and Clearing Limited (2005), proposed a raftof new measures dealing with the disciplinary issues in theorganization. Corporate governance as a concept reiterates the needfor firms to see to it that activities are conducted in line with theestablished rules. The rules could form part of the policies thatfacilitate the governing of affairs within the company. However,there are instances when the directors violate such rules. Because ofthe same, it becomes mandatory that the issues are addressed througha proper channel. A proposal that aims at highlighting how a breachof the policies would be addressed helps in ensuring that theviolators get justice for the mistakes committed.

Accountability measures have equally been proposed with the ultimategoal of ensuring that there is transparency in the running ofaffairs. The measures will be in line with the suggestions that havebeen suggested by the regulatory watchdog. Notably, it has beenproposed that the budget must be approved by the Financial Servicesand Treasury while audits will be exercised by the Director of Audit(Hong Kong Exchanges and Clearing Limited, 2005). It is critical toconsider that the proposals are instrumental in ensuring that thereis transparency when it comes to the running of affairs within theorganization. Increased accountability measures within anorganization are instrumental in seeing to it that company directorsare aware of the repercussions that are likely to ensue if there is abreach of the identified laws.

The introduction of reforms and proposals as regards to corporategovernance helps in enhancing operations within organizations.Shareholders have bestowed the responsibility of running of affairsof the organization on the directors. However, due to the continueddevelopments when it comes to the running of such operations, itbecomes vital that reforms are introduced that aim at adapting to thechanges. Further, there is the aspect of the need to exerciseincreased transparency in the management of the organizations. It isvital to have laws that can indeed see to it that the operations ofthe directors are monitored to prevent issues such as downfalls ofcompanies due to management.

LocalResponses and Trends in International Corporate Governance

There has been an increased support from the locals when it comes tothe overall manner in which affairs are conducted. It is essential toconsider that the inability of directors to adhere to the establishedlaws and regulations could result in closure or failure of thecompanies to execute their mandate. The local communities getaffected since most of them draw their livelihoods from beingemployed in such firms. Because of the same, there has beensupporting when it comes to the introduction of measures that seek toenhance the overall operations of companies. Through the same, itwould be possible to achieve the goals of the organization whileequally improving the economic livelihood of individuals.

The concept of corporate governance continues to draw internationalattention with firms striving to conduct their affairs in ways thatare accepted globally (Bhaduri, &amp Selarka, 2016). Individualcompanies have resorted to exercising their affairs in line with theprinciples of corporate governance. The first issue that has emergedregards the concept of independence of directors. Despite the needfor directors to act in an independent way especially when it comesto decision-making, most have caught themselves in challengingscenarios as they have to answer to the shareholders. However, thefocus has shifted toward creating an environment that seeks topromote the individual independence of the directors especially whenit comes to the execution of tasks that have been assigned to them.Lack of independence significantly affects operations of theorganization since the directors are forced to act in ways thatplease those who have given them favors (Bhaduri, &amp Selarka,2016). It could result in cases of breach of laws and lack ofaccountability and transparency.

Regulatory agencies have focused on ensuring that companies have aboard that is diverse regarding the skilled workforce (Mahadeo,Soobaroyen, &amp Hanuman, 2012). The selection of individuals tofill various executive positions is dictated by factors such as theirsuitability to run the operations of the firm. The regulators acrossthe globe identify the significance of the competency matrices as afactor to be considered when it comes to filling in the boardpositions. Through the same, it would be possible to end up with ateam that has the capability to successfully execute the tasks thathave been assigned to them with the goal of increasing theshareholder value. It is a trend that has been adopted by differentfirms across the globe.

Finally, there is the concept of corporate social responsibility.Companies across the globe have focused on ensuring that theyexercise activities while taking into consideration their impact onthe society. Through the same, activities such as increasedcommitment of organizations in community affairs has been witnessed.Firms have become more responsive when it comes to ensuring that theyimprove the livelihood of people living in the society. Issues suchas environmental sustainability have equally been taken intoconsideration for the purpose of environmental conservation.


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