Handbook on Responsible Leadership and Governance in Global Business
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Handbook on Responsible Leadership and Governance in Global Business

  • Elgar original reference

Edited by Jonathan P. Doh and Stephen A. Stumpf

Ethics, social responsibility, leadership, governance. These terms are heard in the classroom, in the boardroom, and viewed on the front page of newspapers and magazines. Yet serious attention to the relationships among these concepts is lacking. Although commitments to leadership, ethics, and social responsibility are evident, individuals and companies are falling short in combining these duties into policies and cultures that guide behavior and decisions. The missing element is a broad-based and integrated approach to responsible leadership and governance. This volume provides the leading thinking on these issues and includes a discussion of emerging areas that require future attention.
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Chapter 17: Comparative Models of Corporate Governance: A Sociocultural Perspective

Andre A. Pekerti


Andre A. Pekerti Introduction Two relevant questions that scholars in the area of corporate governance have posed are whether there is, and whether it is appropriate for firms to utilize, a universal corporate governance system. It is of interest that the two questions posed above actually suggest that there may be significant variations in the way corporations are governed across nations. This chapter discusses different models of corporate governance that exist in business, and how culture has significantly constructed these governance systems by outlining how culture influences economic systems and ownership structures. The chapter highlights the area of managerial assessment to discuss the possible biases that may arise when firms adopt a universal corporate governance system. In particular, the chapter discusses how ownership structures and various corporate governance systems may influence the way corporate boards (firms) evaluate their managers. It illustrates how corporate governance practices are affected by macro cultures by providing an example from the field of social psychology and leadership studies. The example highlights how biases may disadvantage managers when factors in the environment are not accounted for during performance evaluation. The chapter concludes with a number of simple yet practical recommendations that can be applied to alleviate some of the biases that corporate governance boards may have during performance evaluation. Corporate governance as a socially constructed concept In recent years there has been a wealth of studies on corporate governance; however most have focused on the principal–agent paradigm. The literature also indicates that...

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