In Germany, labor unions traditionally have had seats on corporate boards. At Japanese firms, dozens of loyal managers cap off careers with a stint in the boardroom. Founding families hold sway on Indian corporate boards. And in China, Communist Party officials are corporate board fixtures.
Just as different nations have developed languages, foods and local customs, they also have adapted their own forms of corporate governance and board structures. Now, as business continues to globalize, new pressure from international capital pools and government regulators may diminish the local and national flavor of corporate boards, according to Wharton faculty and other experts in corporate governance.
Wharton management professor Michael Useem says companies around the world are increasingly converging on a model developed largely in the United States in response to the growing power of global capital investors. As a result of new technology and liberalization of government controls on capital flows, massive pools of investment can move in and out of countries more freely than ever before. Companies that globalize operations or ownership know that adoption of internationally accepted governance standards would help them compete against other firms, he argues.
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