R Madhumathi

The diverse system of corporate governance in some of the developed and the developing countries around the world has been studied. In most of the countries, the committees that are present in common are: audit committee, compensation and nominating committees. Boards are unitary in nature in the United States and in the United Kingdom. Establishment of remuneration committee became active after being insisted in Greenbury report in the U.K. There is either a unitary system of governance or two tier systems with the management committee and the supervisory committee. Two tier board structure has been followed in most of the firms in Germany. In Hong Kong there is an outsider system of governance with an insider mould. Family ownership is predominant in Hong Kong. Malaysian system of governance is insider-oriented and is controlled by the founding families. Board structure is one tier in nature. Governance code recommends a board with only independent directors in Malaysia especially nominating committee. India has a one tier board structure. Significant differences persist in the corporate governance practices of countries studied in this research paper.

Corporate governance has greater relevance especially in the wake of financial turmoil spillover effects to other countries across the economies. Specific governance characteristics such as board structure, board size, identification of board members and committees constituting governance board are differentiated across selected countries. This study examines four factors namely economic status, legal system, democratic status and culture. The regulatory requirement specified by each country in the sample is analyzed examining the similarities and differences identified. The research hypotheses were analyzed using Kruskal Wallis test. System of corporate governance is influenced with respect to compliance of legal system across countries. Number of committees present in the governance board differs with respect to the legal system and democratic status followed across countries. Regulatory compliance of financial expertise of directors and other specific criteria of audit committee members have been differentiated by factors such as economic status, legal system and democratic status.