Corporate Governance in a Globalizing World Samples for Students

Question: Discuss the Corporate Governance Issues raised using Corporate Governance Theories to Illustrate the Importance of these Issues. Why are these Issues of Importance to business and the general public? Answer: Introduction Corporate Governance is one of the most important aspects for the global businesses all across the world. It is important for most of the global multinational organisations to make sure corporate governance is rightly implemented in the organisations which would help to understand the key loopholes in the market. Corporate Governance is conundrum for most of the small and medium scale companies but the bigger organisations have been able to manage their corporate governance effectively. There are number of organisations in the global world that have gone up the ladder in corporate governance like Tesco and Wal-Mart, Apple Inc have had quintessential hold over Corporate governance. On this note it is important to discuss the meaning of corporate governance which would help to go further in the study and understand its impact on business and general public (Erkens et al., 2012). Corporate Governance could be defined as the set of rules and regulations and practices and processes by whi ch a company is directed and handled. The main focus of corporate governance is to balance over the different stakeholders involved in an organisation and also to ensure their interest is met properly which would help the organisations to keep their interest intact and also have their involvement in the organisation. In the globalised world effective corporate governance has become indispensable than ever as the stakeholders of the different organisations are spread all around the world. In this scenario handling the stakeholders like consumers, governments, media, suppliers, investors and community. It is contemplated that the future of global governance is complicated as there are number of factors that affect the practice of corporate governance in this highly technology influenced market. The organisations and government should be focused on addressing the corporate governance issues effectively for the smooth operation of the business and moreover, for the effective handling of the stakeholders and general public. It is important for the organisations to make sure that corporate governance is implemented effectively by the organisation which would help to communicate effectively with the stakeholders of the organisation. In a globalised world there are number of issues that needs to be handl ed properly. Stakeholder rights and shareholder rights, Corporate Social responsibility are some of the key issues which are involved in overall corporate governance (Tricker and Tricker, 2015). There have been significant discussions regarding the role and impact of corporate governance that has provided insights to practice corporate governance in a globalised world. One of the contemporary issues that emerged as important for the organisations is to consider the role of the employees in corporate governance. The employees play an important role in the effective application of the corporate governance (Davis et al., 2012) . It could be said that the application of corporate governance involves number of aspects of employee management. The present study will take into account the aspect of diversity management of employee which clearly shows that the global organisations should emphasise highly on developing its diversity management so that all the different sections of people are properly considered for opportunities and career development which would help the organisation to manage their business mechanism effectively (Davis, 2012). The present study will analyse the conc ept of corporate governance effectively which would be done with the help of secondary research mainly done on magazine or newspaper article. In this article has been chosen as it discusses one of the key aspects of corporate governance. Clean up your act on diversity, government tells FTSE companies: Allen K (The Guardian) Corporate governance is not only focused on understanding the different needs and wants of the stakeholders and accordingly developing a strong strategy to make sure they are properly addressed but it also concerns with the maintaining a proper balance among the stakeholders which would help to not only address the different needs and wants of the stakeholders but it will also help to make sure they are with the organisations. From the global perspective corporate governance entails the practice of managing the stakeholders and making sure they are satisfied and in this scenario the employees become one of the key stakeholders to be maintained properly. Employee management is one of the key aspects that the organisations will have to maintain properly. In a recent article published in The Guardian exactly highlights the perspective of the Business ministry of UK regarding diversity (Allen, 2017). Diversity has been a subject that the managements of top class organisations in the list ed in London Stock Exchange have had to address due to the extreme pressure of the Business Ministry of UK. The Business Minister of UK has written to all the top listed multinational organisations of UK to develop their diversity management in business and provide opportunity to the different castes and ethnic groups. The government has also emphasised on saying that these businesses will have to publish a proper breakdown of their workforce by race and pay band. The issue of diversity not only prevails in UK but it is a global corporate problem now because most of the organisations have failed to maintain diversity in their workforce and in case there are certain companies who have tried to bring diversity in the workforce it has faced number of issues like discrimination, bullying and other problems. The article mainly emphasised on promoting the careers of the black people as well as other backward races through better career opportunities and better pay. It is also emphasised that board of the FTSE-350 companies should also have diversity in its board which would help to understand the key issues of the different races working in the company and from a broader perspective it will also help the organisation to make sure it facilitates general people as well. In a recent review backed by the UK government showed that supporting the black minorities at the workplace could definitely impact on the overall economy positively and hence the gove rnment of UK has been much focused on advising the FTSE 350 companies to address their diversity issues. The UK government has set a benchmark for all the governments all across the world to take a positive initiative in influencing the organisations especially the multinational organisations to develop their diversity management in order to provide effective opportunities to the different races and ethnic groups to improve the workforce as well as the economic condition of a country (Brammer et al., 2012). The review organised by the government which has been published through The Guardian shows that the managers have often been seen as prejudiced in terms of recruitment as well as for promotions which has not only affected the productivity of the organisations but it has also affected the overall liberalism of the country. As per the Agency theory of Corporate Governance it is stated that the different entities involved in the company take agency or the ownership of the organisational work and also sees the relationship between the different entities involved in the organisational operation like the company executives and the managers, the shareholders and the agents of the organisation (Berndt, 2013). The better the relationship better the productivity of the organisation. Effective performance is important for an organisation as it not only contributes to the overall performance of the organisation but it also contributes to the overall economic development of an organisation and he nce it is important for an organisation to make sure all the different stakeholders are involved in the operations. The agency theory strongly develops a bonding among the different stakeholders which would help the organisation to make sure to have proper bonding and relationship (Clarke and Branson, 2012). The agency theory also highlights the importance of taking responsibilities for the organisational works that would definitely contribute to the overall development of the organisation. In this scenario poor diversity management in the multinational companies will affect the agency or the responsibilities of the stakeholders. The agency theory mainly indicates to involve every level of employee. This has been indicated by the ministry of Business in UK that the involvement of the different black and ethnic groups which means that the poor diversity management in organisations will affect agency of the organisations. In the globalised state of affairs diversity becomes extremely important as multinational companies will have to operate in different states with different employees who are of different race, caste and creed and religion. In this scenario the agency theory will have to be implemented (McNulty et al., 2013). Diversity should be there in different levels of the organisation even in the board which would help the board members to understand grievances of the different employees regarding working in a diversified environment. With poor diversity at the workplace employees will not be satisfied and it is also likely to create conflict at the workplace creating a complete unrest in the organisation. Effective diversity management by an organisation boosts the overall corporate governance in fact global corporate governance of the organisation. Effective diversity in a globalised business promotes communal harmony and also sets the organisation as an epitome of setting up communal harmony as a business operation (Gereffi and Lee, 2016). The stakeholder theory defines corporate governance as a collective practice where different stakeholders who are directly or indirectly affected by the organisation. As per this theory employees are considered as one of the key stakeholders in a business and hence it is important for the organisation to make sure all the employees are properly involved in decision making in order to get the best possible decision for an organisation. The stakeholder theory relates highly with diversity management for an multinational organisation as in a globalised set up it is important for the organisation to maintain effective balance in its workforce through expatriates and local people and is also important to make there are ample scope for different races to get involved at work which would not only set an example for other organisations but it will also help the organisation to have a positive impact on the general people. The general people or the communities are mostly focused on analysing the role of the organisations through its contribution to the community. In this article the report developed have highlighted that the inclusion of backward classes and the black people will largely boost their morale as well as their communities which will increase their faith in equality and justice and they will tend to cooperate not only with the organisations but also with the government which will contribute to the overall economic development of the organisation. The study states that it is important for the governments and the global employers to involve people from different background which will increase communalism and harmony among the different sections of people and will also influence their performance in the organisations and in global business setting. The stakeholder theory effectively highlights the importance of engaging people from all the levels in the organisation which will not only help to manage diversity at the workplace effectively but also helps to implement effective corporate governance practice in a globalised setting (Hermalin and Weisbach, 2012). The issue of diversity is important for the organisation as well as the common public because effective diversity management helps an organisation to have communal environment in an organisation which influences the productivity of the organisation and it also influences the community by setting an effective example of communal harmony which conducts within an organisation. The corporate social responsibility theory of Corporate Governance highlights the fact that organisations should be connected with the communities and hence through effective diversity management the organisation is not only able to manage its organisational activities properly but it also able to connect with the bigger mass of people who are influenced by effective practice of the organisation and try to practice the same in the society (Allen, 2017). Conclusion The present article from The Guardian states that operating in a globalised environment requires help from all the different races and castes and enabling the involvement of them is effective not only for the development of the organisation but also the society as elimination of ethnic issues and race issues will help the society to conduct positive energy important for the overall development of the countries in a global environment. References ALLEN, K. 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