Frequently Asked Questions

How does globalization impact the role of corporate governance for companies entering new markets?

Globalization significantly impacts the role of corporate governance for companies venturing into new markets. As companies expand globally, they must adapt to new circumstances, adhere to new parameters, and seize additional opportunities. This is crucial to ensure they operate ethically, just as they would on a local or national scale. Corporate governance, as defined by the World Bank, is a mix of regulations and laws that require voluntary practices from the private sector. This allows corporations to attract employees and raise capital from investors. The corporation, therefore, performs with efficiency by operating under governance guidelines through the generation of long-term value. Also, the corporation must respect the rights of society, as well as shareholders. The principles of corporate governance, such as integrity, responsibility, fairness, accountability, and transparency, are universal and should be upheld regardless of the market a company operates in. Companies that do not abide by these principles could face litigation, court prosecution, or sanction from state officials.