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

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 Corporations by 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

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

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.

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.