• ATM Adnan BGMEA University of Fashion and Technology
  • Hilda Tandigalla The Audit Board of The Republic of Indonesia (BPK)
Keywords: Stakeholder, Shareholder, Corporate Governance, Agency Theory. Stewardship theory, Accountability


Corporate governance (CG) has emerged as one of the most recognized areas for researchers, academics, practitioner, and regulators over the last few decades. This paper will initially present an epigrammatic overview on key developments in corporate governance along with the intellectual foundations of the ‘shareholder versus stakeholder’ argument. Additionally, this study tries to analyze the contemporary shift in the perception of corporations from the shareholders wealth maximization to stakeholder’s valuation. It has been noticed that investigating cross country and firm based variances in wealth distribution between diverse interest groups is likely to continue as major focus for CG study. It has been experienced that the nature of the corporation is changing around the globe, Big multinationals have been splitting into smaller liberated corporation, access to capital market is become easier and physical resources are easily replaceable and less exclusive to business strategy therefore the human resources turn into significantly important means to a corporation’s existence and growth. In addition to that firm’s relationships with community and goodwill are becoming equally crucial. In line with that, the implementation of corporate governance principle in every country can be vary because of their different cultural, existing legal system, environmental condition, social and historical values. In addition to the principle differences regarding the interests of the parties served, the two orientations of corporate governance also differ in terms of purpose. This means that the corporate governance evolution will be progressive and different according to individual countries. Furthermore, from a systems-based viewpoint, recent progresses are often viewed as a “mixture” of domestic CG framework. Fundamental features from stakeholder leaned system are reframed with latest aspects of equity-holder leaned models, such as comprehensibility and precision. Shareholder and stakeholder focused CG, might help to create an equilibrium or complement each other such as happening in Germany and Japan. Global standards are also playing a major role in the recent convergence of CG.


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