Question

Review the website of any country with information on corporate governance. Compare and contrast the corporate governance system of that country with that of the United States.

Answer 1

Since any country could be taken, the comparison between India and the USA is being made here. India has been considered here because India is a developing nation, while the USA is a developed country, therefore, a drastic difference can be expected.

Corporate governance is, first of all, the way that the corporates are governed, controlled and operated in a nation. With being one of the fastest growing countries in the world, a lot of prospects are seen in India, with more countries investing and establishing firms there. Therefore, this comparison would be helpful for a USA-based firm to establish a firm in India.

In the USA, there are many practices followed such as there is an independence of the auditors, there is a board leadership structure, there are proper standards established for the financial reporting, there is a guarantee of cyber security and the protection of the firms' data and of course, the regulatory bodies are very effective.

How India differs from the USA in this regard is that there are also many practices followed in India, however they differ from what is being followed in the USA. Some of these practices are there are strict regulations against the insider trading, firms and employees have to disclose their remunerations, there are well-established codes of CSR and ethics reporting, more and more women, people from minorities, and culturally different people can be seen on the board and the licensing terms are very strict.