The major issues that need to be addressed by effective corporate governance in the 21st century

Abstract

Purpose This paper aims to underline and evaluate what corporations are as artificial entities, the concept of corporate governance (CG) in the twentieth century and whether a corporation owes allegiance to its key stakeholders in the twenty-first century. Design/methodology/approach Because it requires development in the twenty-first century, a clarification of the key areas of reform in “global corporate governance” is overdue. These include an analysis of the stakeholder role; the logic and effect of the codes of corporate practise such as in the Cadbury Code and Combined Codes. The “value chain theory” in CG and how it should be placed not only on financial value but also on natural, human and cultural values will looked at. This paper also provides a brief insight into major multi-national corporate collapse. The Enron case, for example, highlights how such mishaps can be avoided to rekindle trust and transparency, as well as disclosure to authorities, shareholders and the public. Findings This paper looks at how public interest and consumer interest play a role in corporate existence by analysing an inevitable change in the twenty-first century from absolute corporate control to public/consumer control and have an influence in areas like environmental, ethical and employee protection and recognition. The emotional side of a corporation is brought to life to win the hearts of consumers and the public. How this fares in the light of profits and long-term Environmental Management Scheme investment will be evaluated. Originality/value This paper ends with a general conclusion, summarising the necessary changes to governance and the author’s opinion on the realities of change: will it work, will it improve the living standards or will it just increase the gap between well-organised and ill-fated economies?

Blockchain technology in corporate governance: disrupting chain reaction or not?

“…Stakeholders in corporate governance namely customers, creditors, suppliers, community, employees, owners, investors, trade unions and social activists could benefit in different ways. Investors and financers could benefit from being able to purchase equity at low price and to sell them into a market with greater liquidity, but they would found it difficult to camouflage their trades (Al-Tawil, 2016). Managers who get hefty incentives from stock-based compensation may lose profit opportunities from legal insider trading, due to the greater visibility of their transactions on the blockchain (Yermack, 2017).…”

“…Blockchain may enable corporate voting more precise and strategies such as ‘No voting’ that are intended to isolate voting rights from other aspects of share ownership will make difficult to execute furtively (Yermack, 2016; Sisli Ciamarra, 2012; Christidis and Devetsikiotis, 2016). Further, the enhanced speed, accuracy and transparency of blockchain will motivate shareholders to participate more directly in corporate governance and demand votes on most sensitive issues and with greater frequency (Haque, 2018; Kostyuk, 2005; Al-Tawil, 2016; Lepore et al , 2017). By using an embedded trust component, blockchain does not warrant someone to appear physically to prove who they are (Al-Tawil, 2016; Lafarre and Van der Elst, 2018).…”

“…Further, the enhanced speed, accuracy and transparency of blockchain will motivate shareholders to participate more directly in corporate governance and demand votes on most sensitive issues and with greater frequency (Haque, 2018; Kostyuk, 2005; Al-Tawil, 2016; Lepore et al , 2017). By using an embedded trust component, blockchain does not warrant someone to appear physically to prove who they are (Al-Tawil, 2016; Lafarre and Van der Elst, 2018). Blockchain offers lower costs of trading and more transparent ownership records, while allowing visible real-time observation of transfers of shares from one person to another (Deloitte, 2016).…”

Aksesibilitas Informasi, Sistem Pengendalian Internal, Pelatihan, dan Akuntabilitas Pengelolaan Dana Desa: Peran Teknologi Informasi

“…Good governance pada abad ke 21 memerlukan adanya kepatuhan yang ketat dalam kaitannya dengan tanggung jawab akuntabilitas, informasi yang akurat, dan transparansi (Al-Tawil, 2016). Akuntabilitas merupakan alat yang digunakan sebagai kontrol dalam suatu organisasi dan mempunyai peran terkait penyelenggaraan kegiatan pemerintahan (Mada et al, 2017).…”

Audit committees in financial institutions in Saudi Arabia: a dichotomy of perceptions of functional independence and the reporting of financial crime

“…Independence becomes desirable but not if it results in embarrassing disclosures to outsiders regarding shortcomings in AML systems. However, the wider public as well as regulators may have a different perspective, seeing ACs as part of an essential set of checks and balances, and guarantors of accurate disclosure to stakeholders, which are prerequisites to good corporate governance (Al-Tawil, 2016). This can result in an expectations gap (Standing and Van Vuuren, 2003).…”