The 20th century was viewed as the age of management; the early 21st century is predicted to be more focused on governance. There is a distinction between politics and governance, where the former is regarded as cooperation between people with different points of view in order to improve the situation in the country and bring profit to it and the latter is more concentrated on administration and orientating a process of ruling. But on second thoughts we still can speak both about corporate governance and political governance. According to James McRitchie corporate governance is most often viewed as both the structure and the relationships which determine corporate direction and performance. The board of directors is typically central to corporate governance. Its relationship to the other primary participants, typically shareholders and management, is critical. Additional participants include employees, customers, suppliers, and creditors. The corporate governance framework also depends on the legal, regulatory, institutional and ethical environment of the community.
[...] Conclusion After taking a detailed look on the different aspects of corporate governance's history and culture, what we can finally say is that there is a vital relationship between political governance and corporate governance. In this workshop, we have strived to explain the similarities between business and politics as well as the influence that business has on politics and the essential pressure that politics has on business but the question remains at the end is what about the business of politics and how it functions. [...]
[...] Not only political and corporate governance have similarities but they also influence each other. Indeed, the interplay between these two entities is shown through politics' influence on corporate governance as well as through corporate governance's power on political governance (III) Political and Corporate Governance: Similarities 1. The term Governance In 1937, in his article Nature of the Ronald Coase uses the term “corporate governance” to give back the corporation its place in the economic analysis. He introduced the notion of transaction costs into the understanding of why firms are founded and how they continue to behave. [...]
[...] This partly explains why the main issue that is in stake in corporate governance is to assure the shareholders' interest, which is to say the entrepreneurs-investors-owners, which is to say as well and above all the king pins of capitalism (insomuch as it is based on free-enterprise, investment and property). This also explains why the corporate governance's theorists are foremost interested by these firms called corporations, which is to say firms in which managers and shareholders obey to different logics (because they don't have the same interests). [...]
[...] Finally we can speak about similarities of both political regime and corporate governance in different countries. The researches show that most European countries tend to make a centralization of rules through the European Union, where as in the U.S. companies are influenced by the idea of federalism and they are governed by state law and not federal law. As a conclusion we can mention that both government and corporations run on the same principle of team, like in sports: there is a coach who trains and leads the team (president), there are players who make the game (deputies and shareholders in the company) and there are referees to watch the legacy of actions (regulation institutions). [...]
[...] We therefore can make a link between political and corporate governance through this control system. Be it in politics or be it in business, abuses are possible and a system control is thus more than necessary Control Internal Control Internal corporate governance controls monitor activities and then take corrective action to accomplish organizational goals. Examples include: Monitoring by the board of directors: The board of directors, with its legal authority to hire, fires and compensates top management, as well as it safeguards invested capital. [...]
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