Philosophy: Philosophy is a pursuit of a though which may become a way of life. On the other hand philosophy is a logical argument, analytical and clear concepts. Though the need of the philosophy is not most important in life but the style of thinking .Examining world views, questioning conceptual frame works and all wisdoms all together in order to obtain a value, that is philosophy. Plato said “Philosophy is the true reality behind the every- day work’s experiences. “ Philosophy and Education: Common goals of philosophy are: o Development of a total intellect of a person o The realization of human potential Development: The term “Development “comes first from the Harry Trueman in 1949.The speech appeared in public as “Point Four” at development age. Development as a socio-economic context was not new. Both Marx and Leroy-Beaulieu employed it. Lenin wrote a work “The development of capitalism in Russia “in 1899. Conflict between development practices: o Production o Destroying nature and social relation Conflict between Growth and Economic Growth: o Growth is the projection of capital value and income progression. o A simple form to a complex form. Economic Growth: o Economic growth increases goods and services produced by the economy. o Gross domestic production [G.D.P]. o Inflation adjusted o Adjusted distortions of effect on inflation on the price of goods that are produced. Economics: o Potential output o Production of full employment. Corporate Sectors: Corporate sector is a centrally unified management. Plato said “Existence” in the power. It’s a real entity theory- not an imaginary of fictitious. Corporation: Corporation is a legal entity enjoys most of the rights, responsibilities which enjoy an individual process. Bangladesh has: o 45 Ministries o Local government: City Corporation o Public universities, govt. colleges, govt. hospitals. o National bank finance institutions o National industries. Market and Corporate Government: Market needs corporate government. There are two type of government, Global Market and Financial Capital. For high investment capital is used efficiently and effectively. It produces good returns, free from interests. It depends on Authority and resource credibility based on efficiency and effectiveness. I also create more robust economic development. Only corporate governance can rules and practice over cross country researches. o Sophistication and quality bank system o Sound economic growth o Banks and Financial Institutions o Acting as direct investors or agent o Works without access to competitively price capital o Business cannot be expand or modernized Financial capitals are: o Labor o Goods o Services. Poor Marketing: o Volatility o Market integrity o Fair trading All are disrupted. Corporate Governance: o Well function legal and judicial system o Property rights must be clearly write and enforced o Key regulation concerning discloser and accounting o Effective and competent supervision to ensure proper compliances. o Strongly protect : Share holders Dilutive offers Freeze out and frauds. o Challenge to build institutional capabilities o Level of competition in the market o Distinguish company and crowded field. Countries Institutional capabilities: There must be train leaders in government bodies for the business and other key parts of the society. Global corporate governance: o Institutional directors o Training board directors o Others in good corporate governance practice and continue standards o Contributing growths and developments in economics. Emerging Markets: o Founders and families tend to retain disproportionate share of control, minority investors have few protections. Corporate Governance: During the financial crisis of 1992 in Russia, Asia and Brazil the behavior of the corporate sector affected entire economics, Structural Reforms: o Price deregulation o Increased competition o Broadened companies o Exposer to market focus Expand of Emerging Market: [U.S.A mainly]: o Resolution for the emerging markets are : Well beings are less discussed. Collective action problems among dispersed investors Reconciliation of conflicts among various corporate claim holders. C.S.R: Corporate social responsibilities: Participation of: Stake holders Share holders Corporate decision making. After World War 1 in the time of economic booms, privatization, deregulation, development of conglomerates came across. Ownership and Control: o Board directors followed by the common laws. o Supervisory Board and Managing Board by civil laws. o Partners. Better corporate government: o Financial institutions o Institutional investors There are three areas of Corporate Governance are: o Nature and Strength o Link between good corporate governance o The role of political factors. Gap: o Economic development and well- being. Behavior Pattern: o Performance o Efficiency o Growth o Financial structure o Treatment of share- holders and stake holders Normative Frameworks: o The rules under the firms operate. o Legal system o Financial Market o Factors [ labor market ] o CSR [ Sustainable concept] Late acceptability of Corporate Governance: The proliferation of the crisis over the past few decades, including ongoing financial crisis, Corporate Governance affects over all well -being. o Employment o Consumer spending o Pensions o The finance of national and local government’s world-wide. Weakness: o Excessive risk taking o Skewed incentive compensation o Senior managers o Short time gain over long term performance In global aspect is corporate governance is optimal for all? With the emergence of China, India and Brazil, among others as Global Economic Powers, the traditional model of Corporate Governance are followed along with monitoring and supervision through active investors and free and informed financial media and so on are active. Corporate Governance doesn’t vary with the area situation because of its decision making but need a friendly opera table environment. Framework extends to rules or Institutions: Frame works deal with the rules related to that market and outsiders. Second prevalent in other areas views Institutions – especially banks and insiders to determine corporate governance frame work. Mobilization of Capital: Mobilization of capital removed from the principal owner to give in increasingly size of the firms, the growing roles of intermediaries and the complex financial derivatives in investment strategies. For good Corporate Governance Arrangement requires: o More agents- asset management companies o Hedge funds o Institutional investors o Proxy advisors. All involved in investment process. There are multiple steps between the investors and his final user of the investor’s capital. Financial integration has led to the many cross borders issues and save long standing by “Institutional “rephrase. Technological progress in upcoming financial markets with trade liberalization and other structural reforms are ahead. [Notably, deregulation and the removed of restriction on product and ownership.] Corporate Govt. provides clear, transparent financial statement. The link between financial growth and development: Main importance of the financial system is for growth and poverty reduction. Excessive risk in financial development is affecting even the global in scope. Extensive economic growth is measured between cross country initiatives. Empirical studies using variety of economic techniques, suggest that the relation on casual one. That is the result of better countries is not with only larger financial system or growth. Banking sector also helped G.D.P countries with more limited banking system [private credit to G.D.P ratio below 30%]. The average growth rate is 2.7 percent from 1990-2010 whereas countries with more developed banking system have experienced growth rate exceeding 3.2 percent. Through recent financial crisis it is understood that a large financial may have slow growth rate but associated sectors have larger growth rate. A good legal and judicial system is also assured that economic developments are shared by many. Financial markets are the institutions and the have a direct impact of growths. The role of competition: Financial market includes all outputs and inputs in disciplining firms. Firms subject to more disciplining market: o Labor Market o Raw Materials o Intermediate products o Energy and o Distribution service. Competitive industries leave no room for managerial problems to fester. Competitive ownership has no effect in bad corporate governance. India proved that competitive forces are more important than ownership effect. Intense competition market may not always be good either. There is a chance of more take away though negative effect defenses and firm performances, long term relationship may cause take over which is a negative impact on these stake holders. Impact of group affiliation: Being part of group affiliation can be valuable, unavailable internal market may help which is missing or incomplete external [financial] market. However group or conglomerate can also have costs, especially for investors. They often come with worse transparency and less clear management structure. That opens poor corporate governance. Rights and voting rights on stock valuation are credibility. In more market based economics that are also more competitive, group affiliation is less common. Mutual funds make conflict in interest and the Corporate Govt. fund itself. Dominant share holders alters the institutional investors, Corporate Governance role, because they have little direct influence through voting or board representation or otherwise. Larger firms may not disclose their information and lack transparency between large and weaker conglomerations. Corporate Governance Reform: Better Corporate Governance for firms, markets and developing countries; political economic factor constraints sufficient reforms. Recent reforms are: o Major fundamental changes in capital market o Law and regulation [ Korea ] o Turkey just few specific aspects : To Qualify firm level performance Donors and financial Institutions Strong foreign Institutions Investors Vs. weak legal protections Civil laws of countries often less revise and update their codes. The role of political economic factors: We should check the past history of colonization with its pattern like the legal system: o Judicial system and performance o Labor market regulation o The financial sectors o Entry by new firms o Financial sectors developments o State ownership Better to feed their own circumstances and needs. They might operate countries with liberal framework. For the ownership structure wealth may lost in control and power structure. Last of all we may quote for the corporate governance “Higher return in equity and great efficiency. “
Posted on: Wed, 02 Oct 2013 06:21:30 +0000
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