chapter  2
18 Pages

Globalisation and corporate governance

As economic globalisation enables companies to operate internationally, corporate governance has increasingly extended from national to international dimensions. There are generally two views on the impact of economic globalisation on regulatory and institutional change of countries. One is that economic globalisation generates forces for legal and institutional convergence between countries, and that the process of economic globalisation will lead to globalising developments in legal systems.1 The other is that the distinctive character of national institutions would be resistant to globalisation pressures and therefore would remain divergent over time.2 This raises an interesting and much-debated question: would corporate governance of different countries converge or diverge in the context of economic globalisation? To address the question, a brief review of the evolution of economic globalisation and its impact on companies is a necessary starting point.