Insider & Outsider Systems Of Corporate Governance Essay

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TOPIC Relative Dominance Of Insider & Outsider Systems In Developing Countries Overview Among the concerns of every investor is the security of their investment, which is guided inter alia by the quality of management employed in the organization. The quality of Corporate Management is more often a result of how effectively the Principles of Corporate Governance are adhered to in a corporation. The existence or otherwise of effective relevant structures and systems that would support the implementation of these principles would be a major factor when investors are making choices as to which system of Corporate Governance to embrace, Insider or Outsider. Case Studies of Some Economies Listed as Developing Kenya 71% of the total Universities in Kenya are Private, i.e. 17 out of 24 Universities in Kenya are Private. Indonesia 16.6% of the total value of listed corporate assets can be traced to the ultimate control of a single family. Philippines 17.1% of the total value of listed corporate assets can be traced to the ultimate control of a single family. NB: The largest 10 families in Indonesia, the Philippines and Thailand control 1/2 of the corporate assets, while the largest 10 families in Hong Kong and Korea control about 1/3 of the corporate sector. Brazil (Newly Industrialised) – Still Listed as A Developing Country Out of 225 listed firms in Brazil, 90% are majority controlled, on average with 76% of voting capital, but only 54% of the total capital. - Of the majority controlled firms, 53% are controlled by families, 30% by foreign investors, 9% by institutional investors and 8% by the government. Colombia Four large business groups dominate Colombia’s corporate sector, three include listed firms. In 2002 9/10 largest firms by trading volume belonged to one of the groups.
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