Convergence Versus Divergence, Global Corporate Governance at the Crossroads: Governances Norms, Capital Markets & OECD Principles for Corporate Governance
There is growing debate as to whether international corporate governance practices can or should converge. Effective corporate governance has been linked to the ability of corporations to compete in global capital markets. Corporations operating in diverse economies have capital structures that are the result of public and private choices, and the corporate governance issues that arise reflect these structures. There is market pressure for convergence of corporate governance norms. The OECD has formulated Principles aimed at setting standards for corporations as they seek to attract capital. While the shareholder protections proposed are helpful in articulating norms that will attract long-term investment capital, the Principles fail to fully appreciate some of the current tensions between shareholder rights and obligations of corporate officers. Moreover, while the Principles suggest that corporations comply with laws regarding obligations to stakeholders, they fail to adequately discuss why shareholder rights are elevated to a universal norm, whereas accountability to other parties implicated in the corporation, such as creditors and workers, is not
