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Edited by Andreas Georg Scherer and Guido Palazzo
Chapter 21: The Interrelationship between Global and Corporate Governance:
towards a democratization of the business ﬁrm? Grahame F. Thompson Introduction According to the United Nations Conference on Trade and Development (UNCTAD) in 2006 there were upwards of 77 000 multinational corporations (MNCs) (UNCTAD 2006, p. 10). Of these, some 57 000 were from the developed countries. In all, these MNCs involved about 770 000 foreign aﬃliates. The rise of the MNC is often associated with the development of globalization – indeed it is taken to be one of its prime indicators. However, quite whether these MNCs are truly ‘global’ is another matter. In fact, most of them are conﬁned to a home base with only one or two overseas operations or aﬃliates abroad. And even the largest MNCs tend to be supranationally regional in their operations rather than global (Rugman 2005). They still mainly operate on their home territories, with key foreign activities conﬁned to close regional markets and sources. Nevertheless, the development of internationalized companies poses new problems for both their internal corporate governance and their external regulation. This chapter seeks to explore the relationship between several features of such regulation and governance. First the relationship between internal governance and stakeholding is explored. This inevitably involves some discussion of corporate social responsibility (CSR) since it is the pressures put upon companies through the CSR movement that has served to raise issues about the expansion of stakeholder interests within company governance structures. In part this also relates to the particular legal form of the limited liability...
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