Establishing a Multi-Stakeholder Board for Multinational Corporations
23 Pages Posted: 27 Jan 2017 Last revised: 13 Mar 2017
Date Written: December 16, 2016
Abstract
Several corporate scandals are related to lack of concerning stakeholders’ interest. The voice of enhancing stakeholders’ engagement in corporate governance framework is increasing. The paper is aimed to determine the pragmatic and applicable one-tier and two-tier board models for integrating stakeholders as board directors in multinational corporations. It begins with discussing why multinational corporations need to concern on stakeholders’ interest and analysing different theoretical approaches for linking board composition with financial performance and corporate social performance. It will then review corporate governance frameworks integrating stakeholders’ engagement in various jurisdictions and economic status (i.e. emerging markets and developed markets). Finally, pragmatic multi-stakeholder board models for one-tier and two-tier board structures will be proposed through defining board composition, CEO duality and mechanism to resolve disputes arise from board members.
Keywords: Board Diversity, Corporate Governance, Multinational Corporations, Multi-Stakeholder Board, Stakeholders Theory, Shareholder Supremacy, Board of Directors, Role of Directors, Independent Directors, Stakeholder Governance, Corporate Social Performance, Board Structure, Corporate Scandals, CSR
JEL Classification: G3, F23,M14, M16, O16
Suggested Citation: Suggested Citation