According to Florini (2003), global corporate governance is the collective management of companies globally, that is, the transfer of companies from regional cooperation between them according to the laws of their countries to global collaboration under the statutes of unified laws that suit everyone and work on development and prosperity.
I will discuss global governance from a corporate business perspective in this paper. What is the difference between it and regional governance? What issues make global governance unique?
Importance of Global Governance:
According to (Goodman, Martin, O'Kelley, and O'Kelleyynolds, 2018), Global governance organizes the work of companies globally in a framework agreed upon by all to serve their interests without neglecting the common aspects such as preserving the environment and the trend towards sustainability.
The Difference Between Regional and Global Governance:
The difference lies in the companies from the governance standards that the organization has set for themselves, or even governance standards set by the state by the country's regulations, and access to more global standards of governance, so now we find widespread examples of this represented in the regulation of financial markets globally as the guidelines for multinational corporations developed by the Organization for EconomicCooperationn and Development (OECD).
As well as international accounting standards and bond rating agencies, in addition to the principles of governance of private industries such as emission reduction laws for automobile production, the penalties and fines that result from these laws could reach billions of dollars, imposed by states that are committed to this global governance. Otherwise, companies will be unable to operate in these countries (Jang, McSparren, & Rashchupkina, 2016).
Global Governance Challenges:
The challenges lie in the incompatibility of countries' cultures and the extreme productivity variance, making it impossible for regional companies to adhere to one global governance system. Security and stability, ethnic conflicts, diseases, and epidemics in some countries also impede companies with international governance standards (Inside America's America, 2015).
Issues that are Unique to Global Governance:
Global governance focuses more on the common interests of all countries in the world and not on the interest of a particular company or group of companies of a country; for example, it is unique in exercising control over environmental standards for industries, in addition to more cross-cutting issues such as diversity, persecution and the dangers of climate change, in addition to coordinating between companies and countries in managing resources and achieving sustainability standards (Aguilera, Marano & Haxhi, 2019).
Conclusion
Since the fifties, there have been many attempts to establish global governance that includes most of the companies that operate at the international level, but have failed due to the challenges above; now, during the communications revolution, the spread of global markets and the increase in the participation of non-governmental institutions, all this led to the growth of global governance, in the world of business, global governance leads to increased global interconnectedness of business, in the past decades, the scope of the industry has expanded globally in such a way that every company can't condone governance away from the global system and the standard standards agreed upon by most countries.
References
Aguilera, R. V., Marano, V., & Haxhi, I. (2019). International corporate governance: A review and opportunities for future research. Journal of International Business Studies, 1-42. (Review and glean concepts and theories between p. 3 – 36).
https://www.researchgate.net/profile/Ilir_Haxhi/publication/331726582_International_Corporate_Governance_A_Review_and_Opportunities_for_Future_Research/links/5c8e545992851c1df9480279/International-Corporate-Governance-A-Review-and-Opportunities-for-Future-Research.pdf
Florini, A. (2003). Business and global governance: The growing role of corporate codes of conduct. Brookings Review, 21(2), 4.
Goodman, A., Martin, M., O'Kelley, O'Kelleyynolds, R. (2018). 2019 Global & regional trends in corporate governance. Harvard Law School Forum on Corporate Governance.
https://corpgov.law.harvard.edu/2018/12/30/2019-global-regional-trends-in-corporate-governance/
Inside America's America's (2105). Board Challenges: When Companies Consider Going Global [Video file].
https://www.youtube.com/watch?v=ibrEOJdFTNI (14:16)
Jang, J., McSparren, J. & Rashchupkina, Y . (2016). Global governance: present and future. Palgrave Commun 2, 15045
https://doi.org/10.1057/palcomms.2015.45