The ethics of corporate governance

Abstract

PurposeThe paper presents an overview of perspectives on corporate governance grounded in the Common Law legal traditions of the UK and the USA. It further discusses whether that perspective is suitable for global application.Design/methodology/approachThe paper presents personal observations on the operational dynamics of rules and practices of corporate governance as necessary functional supports for large scale financial capitalization of enterprise under conditions of modern industrialization.FindingsThe paper concludes that the US perspective on corporate governance is rationally related to objective requirements of financing enterprise and that, as capital markets become larger and more liquid around the world, the corporate governance regimes will, in the main, come to resemble the US model. Though cultural variations on the US pattern are compatible with the purposes of corporate governance to constrain abuse of power in private corporations.Practical implicationsThe implication of this paper is for the implementation of corporate governance regimes in emerging market countries, i.e. that flexibility is permissible but a focus on transparency and accountability under all circumstances is required.Originality/valueThe contribution of the paper is to provide a framework for balancing the rules and practices of US corporate governance with the cultural styles and patterns of different national regulatory settings.