The cultural influences in effective corporate governance practices: analyzing the trend in emerging market
There is limited research on corporate governance practice in emerging markets. Interest in corporate governance is rapidly increasing inside and outside academia. The recent economic crisis, financial scandals and collapse of many companies in the developed and developing markets have attracted the attentions of researchers and business people to improve the corporate governance practices. International bodies such as OECD (Organization for Economic Co-operation and Development), has examined various member and non-member countries to evaluate their corporate governance systems and to provide suggestions for corporations, shareholders, and other stakeholders who play important roles in improving corporate governance systems. The principles developed by OECD are considered essential for the development of corporate governance systems. However, there are various barriers to effective implementation of corporate governance principles. Considering the importance of emerging markets to the future of the world economy, the focus of this paper is on the cultural influences in adopting effective corporate governance practices in emerging market. This study will initially explore the theoretical background of the corporate governance and the culture influence in influencing corporate governance adoption. The paper also explores the problems with corporate governance systems in emerging market in general and it discusses how national culture influences corporate governance practices.