The Significance of National Cultural Identity
Corporations, Globalisation and the Law series
Chapter 6: Conclusion: The importance of the existence of national systems of corporate governance
Perhaps the most important conclusion of our research is that national corporate governance ‘reflects public policy choices’. Each country has passed a set of laws that shape the structure of its firms in a way that reflects the dominant ideological and political principles prevailing in its society. ‘At the heart of the … capitalist system, the free market economy, lies company law’. It is through the medium of companies that wealth is created. More than this, the way in which companies are regulated says a great deal about the values to which each society and the global community gives preference. As we found at the instigation of this investigation, despite some harmonisation of laws, practices and institutional functions, corporate governance systems especially in the West remain distinctively national. During the research it is clear that even at EU level, the harmonisation between the national corporate governance models has been minimal in comparison with the overall effect that the EU-generated legislative initiatives has traditionally had on areas of policy such as the internal market, competition law let alone monetary union with the introduction of a common currency. Resistance to globalisation and harmonisation lies deep in the roots within the individual national identities, which define the system on the basis of which companies are governed, along with the agenda they ought to pursue and their precise purpose. Drafting company law and the norms of corporate governance is a vital part of democracy, particularly because of the imbalance of power in many countries.
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