In the historical evolution of corporate governance in different regional cultures and countries different choices were made about the most efficient company structures to adopt and the appropriate forms of regulation. At the time of formation fundamental questions were posed which by now have been largely forgotten.
• What should be the purpose of the corporation?
• Is it a community of human beings, a nexus of contracts or the possession of its shareholders?
• Do corporations incur social obligations in return for the privileges that society grants to them?
• What constitutes a fair distribution of rewards from economic activity?
In the study of comparative corporate governance it is important to return to these fundamental questions in explaining the divergence and convergence of governance systems. Which system does a better job of solving the problems of corporate governance?
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