It is often said that a country's corporate legal framework is a Essay

It is often said that a country's corporate legal framework is a reflection of its socio-economic and political values. To wha - Essay Example In this case, corporate governance may favour certain people because they can afford to pay hefty bribes to government officials. Comparing corporate governance in the developed and developing countries, the former are accountable but the later are not. Digging deeper into the political and social-economic situations, people in the developing countries face unprecedented oppression from the very government they choose. It is therefore evident the corporate legal framework of a country reflect its social economic and political values. History of corporate governance Interest in corporate governance started after the Wall Street crash of 1929. Edwin Dodd, and Gardiner C and Adolf Augustus Berle, Jr. Gor very concerned with the Wall Street crash. These scholars were wondered the changes to introduce to modern corporations to protect the stakeholders and the employees. Another scholar, Ronald Coarse from the University of Chicago tried to understand how corporations operated. The main wa s to introduce measures to prevent corporation collapse.1 However, these concerned scholars could not do anything to change the corporations of the time. The American government introduced a set of rules but did nothing much at that time. After the world war two, a class of scholars in management, business and organizational behaviour continued studying modern corporations to come up with ways to make them better and accountable. At that time, some corporations in United States, United Kingdom and other developed countries started establishing branches in other countries. This made the companies complex in that accountability would become challenging. Like before, the scholars in the third quarter of the twentieth century did not do much regarding corporate governance.2 Corporate governance got the attention of the government and the public in the 1990s. In early 1990s, boards of large companies dismissed Chief Executive Officers. Some of the companies involved were Kodak, IBM and H oneywell. Around the same time, it emerged that companies were not accountable in any way. There was a belief that Chief Executive Officers had good relationships with the board of directors. As such, each of the two covered the other in the times of accountability. Emergence of these issues led to a wave of activism, initiated in California by the California Public Employees Retirement system (calPERS). The primary concern for this organization was stakeholders’ protection. The campaigns were making sense but the government did not do much regarding the case. However, this outcry made the government to be more cautious with corporations.3 In the United Kingdom, Steps towards corporate governance started in 1992 when the Financial Reporting Council set up a committee chaired by Sir Adrian Cadbury. The report recommended many things in relation to corporate governance. Some of the recommendations gained acceptance from the beginning but others got amendments along the way. The amendment of the company executives’ compensation clause in 1995 is a good example. Another report on corporate governance came up after the Hampell Report in 1998. Hampell reported evaluated the Cadbury and Greenburg reports and provide recommendations.4 Action on corporate governance became a serious issue in The United States in the early 21st century. Enron and WorldCom became bankrupt and other major companies including Tyco, Arthur Andersen, AOL, Global