Corporate Governance & Corporate Social Responsiblity Research Paper

Corporate judicature & Corporate Social Responsiblity - Research Paper ExampleThe increasing incidents of scandals in financial organizations has facilitated the need for somatic to play a more active persona in promoting good corporate government and behavior. This penning investigates the mappings that banks and institutional investors can play in promoting good corporate governance and behavior in Asiatic economies. Asian financial institutions, banks and institutional investors play important economic roles in the region. However, just like in other regions across the world have indicated, poor governance of the institutions do not only source a decline in profitability, only also could destabilize monetary system if the problem becomes general (OECD, 2003, p13). Therefore, it is important for the financial institutions to ensure implementation and put onment of sound corporate governance behavior. Before investigating the role that financial institutions in Asia can p lay in promoting good corporate governance behavior, it is important to witness the normative framework in these organizations in the region. Alayannis, et al (2003) noted that families own majority of businesses and organizations in Asia and whence relations with stakeholders is mostly informal. In addition, the region has a wide economic and legal diversity but countries such as China, India, Malaysia, Pakistan and Hong Kong have similar legal structures governing business operations. According to Johnson and Mitton (2003, p51) over 65% of all listed companies in Asia are private and are managed and run by families. The companies have been in humankind for several decades and their success is almost fully attributed to the collective efforts of their owners. These business owners have a tendency of forming big interconnected networks of subsidiaries and sister companies, which include partially owned and publicly listed companies. Allen and Douglas (2000) argued that investing in the subsidiaries enables investors to put their investments on a lower floor their chosen management team. In addition investing in the subsidiaries gives the investors an opportunity to put their money in potentially profitable ventures. However, this mode of investment leads to unfair treatment of investors who do not belong to the family that owns the enterprise. referable to the nature of the business proprietorship, the organizations have strong informal relationships between the stakeholders, who are mainly family members or polish friends. In China, the state maintains a strong grip on the ownership of financial organizations and some elements of left laws are common especially on the firms relations with stakeholders (Klapper and Love 2002). To promote good corporate governance behavior in China, Hong Kong and other Asian countries with similar business and legal framework, banks and other institutional investors should enforce credible laws and regulations. Similarl y, judicial systems should enhance their expertise and increase capability to arbitrate conflicts pertaining to corporate governance with directness and efficiency (Holder, et al 2009). Senior management and board of directors of banks and institutions should play a more proactive role in promoting good corporate governance and behavior in Asian countries. In particular, Gregory (2002, p49) argues that