An analysis of corporate governance in the GCC countries and the Literature review

An analysis of corporate governance in the GCC countries and the impact of sharia law on it - Literature review Example As mentioned before that the corporate governance mechanism differs from country to country because of varied reasons like the orientation, time zone etc. This section will help us understanding the functioning of corporate governance mechanism in different countries excluding the GCC countries. The practice of corporate governance policies has a deep influence on the managerial decision making in the UK corporations. It is regarded that the composition, size and duration of the member of the board are important factors that decide a good corporate governance mechanism (Zhang, 2012). The Corporate governance mechanism in UK is deeply influenced by the Cadbury & Green report also known as Cadbury code of best practices and Greenbury report on Director’s remuneration (FRC, 2013). ... It also suggested that the board of directors should constitute of at least three members which are also applicable to Australian companies (EOG, 2013). The chairman, directors and the auditors are selected by the shareholders of the company at the annual general meeting. In France voluntary disclosure of financial statements has been the object of paramount importance (Lakhal, 2005). There are two kinds of financial disclosure; mandatory and voluntary disclosure (Taylor et. al., 2005). In the year 2002 a new set of corporate governance law was introduced in the winter report for the European companies which focused on tightening the corporate governance law. One of the crucial components of the report was to strengthen the role and responsibilities of the auditors. The chairman has to communicate about the internal policies to the internal and external auditors clearly. The legal laws related to French corporate governance are composed of 3 basic laws which include law of new econom ic regulations, law of financial security and law on financial security. However, the ownership structure of companies in France is concentrated even with the increase in the number of shareholders in the privatized companies (Charreaux and Wirtz, n.d.). The ownership structure of the French listed companies has undergone a huge change. However, the presence of increased institutional investors does not mean that their controlling the capital stakes also increases (Braendle, 2011). In the year 2002, 11.3 percent of the French companies had institutional shareholders as the main shareholders of the company compared to a 40 percent and more in USA and UK companies. According to authors Faccio and