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SUMMARY

The global history of corporate governance: An introduction

The theme of this paper is revolving around the capitalism, as in different countries of the world

what capitalism mean and to be. How different world economies governed, as some are under

the command of professional CEOs but some other great corporations are under entrust of old

powerful families.

The word capitalism is used differently in different countries of the world that makes

communication difficult. Some economist of USA is confused by the unwillingness of seemingly

educated foreigners to hold the free enterprises tenants, but foreign active economists marvel at

the simplicity of American colleagues. In fact every person takes more seriously to the other and

does well. All countries of the world instead of USA not simple, but they are less advanced to

various degree.

Every country of the world has its own rules to organized economics and corporate governance

methods. That is how capital is invested and allocated within and across the firms. These

decisions depend on different persons and institutions behavior and environment.

La porta et, al. (1999) conducted a key study to address such important point in the mind of

economic professionals. In their study they make contrast of different medium sized and very

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large ownership companies across the world. The central theme of this contrast study is that how

various countries are different from each other. They concluded from the study that few

immensely powerful families of Mexico have control over the large corporate sector. Whereas

in British the case is different that large companies has no control of shareholders at all.

Similarly on large scale Argentine firms are under the control of wealthy families, but Americans

great corporations are not as well. So control on Great Corporationsby wealthy families is not

restricted to all underdeveloped countries, but they also characterized relatively as rich

economies such as Sweden, Israel and Hong Kong.

Of course there is no clear example of these types of capitalism in such flavor. In this paper the

overall capitalism is composed of variant flavors of capitalism of different countries. In fact

every variant of capitalism have relatively its own importance, both over the time and across

different countries and also have great moment by these variant. Some may consider it as

undemocratic to control the governance of different corporations, by powerful banks, few

wealthy families and some unit of bureaucrats. Anyone command it but they are civil servants,

who are chosen by elected officials, it might be seen undemocratic to some others.

A last if corporate governance entrusting anyone that are reputable families it might be possible

to rashly irresponsible for someone. It is concluded from this paper that powerful banks,

impersonal stock markets, government bureaucrats and wealthy families each of these groups

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arise under different circumstances. They operate in different directions and consequently bring

sets of related issues.

Remarkably the Canada was a corrupt country which is inherited from his old colonial history of

French. There is no difference in Canada current and a century ago capitalistic system. Canada

has its own version of corporate governance system. As they have a pyramidal business group

who are predominance of wealthy family controlled.

China corporate governance system started from very beginning of nineteenth century. This

period is very important as in china it is the start of industrialization and also the start of

transplanting economy model of western institution into nonwestern model. Imperial bureaucrats

of chinas economy are very famous in transaction of offices and nepotism. Bureaucrats

oversight the more profitable business in the country and their wealth is quickly bled away by the

system. In one side the intervention of bureaucrats is worth able as they reduce competition of

investors and managers of the firm because most are dissatisfied with the bribes and fees, but

demand on the other side overloads by their civil services. So in the beginning of nineteenth

century new incorporations laws was enforced.

In France corporate governance is under historical trauma, which gives robust shocks in the

consequent generations. In 1720 the Mississippi company collapse is the result of those

aftershocks that is set as course of French corporate governance. French companies issue their

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ordinary shares with hyped values, that stimulate investment demand and as a result the value of

shares are further goes up. This temporary overvalue of shares shown result in 1720, when no

one escape from this critical issue. Elite Merchants and all aristocracy of French kingdom are

under a great trouble. All the joint stock company of French is banned and some French men that

are intelligent are avoided from financial markets and their wisdom passed down to their

offsprings.

German at late nineteenth century show rapid interest in advanced industrialization. All the

German wealthy families, small shareholders, foreign investors and most of private banks

finance their industry. The corporate governance idea also appears thoughtfully in that

industrialized era. In 1870 company law is enforced in corporate governance which is dual board

model at current time and this law explicitly protects the rights of public and small investors

from inside self-servicing.

The German socialist government at national level started corporate governance foundations by

more modern way. Another law in 1937 (The Nazis shareholders law) also introduced which

give freed to directors and firms managers in their specific duty of firms shareholders, and

substituted a duty to firm all shareholders such as Reich. This law banned by mail voting process

and also enforced all shareholders to register with banks and give proxy rights of voting to banks

on owner behalf. This law actually gives most of the voting rights to banks of most German

corporate sectors. As a result Reich and public can directly control banks.

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Human nature is the common factors which indicate that every elite community of the world is

self-centered in the case of corporate governance rules.