1 Stout (2012) The Shareholder Value Myth: How

1 R Kraakman et al., (2009) The Anatomy of Corporate Law: A Comparativeand Functional Approach (2nd ed., Oxford University Press.

Pp8-9. Availableat: https://books.google.co.uk/books?id=-1VnWGrgID0C&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false  2 Revista Dinero(2017) El poder de las juntas directivas(The power of the boards of directors ) Colombia.

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Available at: http://www.dinero.com/edicion-impresa/caratula/articulo/que-esta-pasando-con-las-juntas-directivas-en-colombia/2429333 Jackson, G.

y Aguilera, R. (2010) Comparative andinternational corporate governance. The Academy of Management Annals, 4(1), 485-556.  Available at: https://s3.amazonaws.com/academia.edu.documents/36969657/Comparative_and_International_Corporate_Governance.

pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1516627794&Signature=g%2B96bAIyd5FJTA5TGMkaX1w3kAU%3D&response-content-disposition=inline%3B%20filename%3DComparative_and_International_Corporate.pdf 4 La Porta R, Lopez-de-Silanes F andShleifer A, (1999)  ‘Corporate Ownership Around the World’ 54 Journal of Finance. Pp475-477. Available at: http://onlinelibrary.wiley.

com/doi/10.1111/0022-1082.00115/pdf5 Gospel, H. yPendleton, A. (2005). Corporategovernance and labour management: An international comparison. Oxford:Oxford University Press. Available at: https://books.

google.co.uk/books?hl=es&lr=&id=YR86f6u95asC&oi=fnd&pg=PR9&dq=Gospel,+H.+y+Pendleton,+A.+(eds)+(2005).+Corporate+governance+and+labour+management:+An+international+comparison.+Oxford:+Oxford+University+Press.+&ots=p_4Pxn2p94&sig=03gXJvgcFI7_RI8OWXenV7W9LdU#v=onepage&q&f=false6 Lynn Stout (2012)The Shareholder Value Myth: How PuttingShareholders First Harms Investors, corporations and the public.

Pp.32Available at: http://scholarship.law.

cornell.edu/cgi/viewcontent.cgi?article=2311&context=facpub 7 La Porta R,Lopez-de-Silanes F and Shleifer A, (1999) ‘Corporate Ownership Around theWorld’ 54 Journal of Finance. Pp 475-477.

Available at: http://onlinelibrary.wiley.com/doi/10.1111/0022-1082.00115/pdf 8 La Porta R, Lopez-de-Silanes F andShleifer A, (1999)  ‘Corporate Ownership Around the World’ 54 Journal of Finance. Pp475-477. Available at: http://onlinelibrary.

wiley.com/doi/10.1111/0022-1082.

00115/pdf 9 Revista Dinero(2017) El poder de las juntas directivas(The power of the boards of directors) Colombia. Available at: http://www.dinero.com/edicion-impresa/caratula/articulo/que-esta-pasando-con-las-juntas-directivas-en-colombia/24293310 G.

Jackson, (2005). Employeerepresentation in the board compared: A fuzzy sets analysis of corporategovernance, unionism and political institutions. Industrielle Beziehungen. Pp.8-15.  Available at: http://citeseerx.

ist.psu.edu/viewdoc/download?doi=10.1.1.447.696&rep=rep1&type=pdf Since the end of the 90s,great efforts have been made nationally and internationally to establishregulations for corporate governance and establish codes of “bestpractices”9.

Of course these codes in most of the countries being guides and not truenormal. Such efforts reflect, to a large extent, a particular notion ofcorporate governance that includes several elements: the protection of theinvestor through mechanisms that guarantee the transparency of business and therights for minority shareholders; boards of directors constituted byindependent external directors; and, the importance of shareholder value as acriterion for the management of decision-making processes. Although on someoccasions there is a brief mention of other interest groups, the great debateabout corporate governance has been kept aside from any explicit notion of thevarious alternative modalities of employee participation in said organizationalinstance. Some more traditional explanations about the representation ofworkers on the board of directors focus on the comparative strengths of unionsin different countries10.As long as unions try to obtain better wages and working conditions for theirmembers, they may also demand rights to participate in the decision-makingprocess of the company. The foregoing evidences a widely known duality, on theone hand, there is the direct representation of the employees within the boardof directors and on the other, and there is the creation of a union ofemployees which works parallel to the board of directors. Situations that aremainly contraries since the purpose of the primary is to involve the employeesin the decision making of the company that is to say the course of the same andthe second scenario the creation of the union mainly looks for the respect ofthe rights of the workers and in some way to improve their working conditions.

On the other hand, thecontrolling shareholders typically have control over firms considerably inexcess of their cash flow rights. This is because they often control largefirms through pyramidal structures and also because they manage the firms theycontrol7.As a consequence, large firms have a problem of separation of ownership andcontrol.

These firms are run not by professional managers without equityownership who are unaccountable to shareholders, but by controllingshareholders. As a La Porta R said “Thesecontrolling shareholders are ideally placed to monitor the management, and infact the top management is usually part of the controlling family, but at thesame time they have the power to expropriate the minority shareholders as wellas the interest in so doing. Cash flow ownership by the controlling shareholdermitigates this incentive for expropriation, but does not eliminate it. As aconsequence, equity markets are both broader and more valuable in countrieswith good legal protection of minority shareholders”8Reason why in the last years there have been several efforts concerning to creatinga better managing of the companies, since the companies have a huge socialimpact, so it must have a qualified leaders at it address. Other importantissue to build a better company and guarantee the rights of all the member ofthe company, is with a good remuneration policy, beginning for members of theboard and key executives. If the  information about board members, includingtheir qualifications, the selection process, other company directorships andwhether they are regarded as independent by the board.Today more than ever theboards of directors are in the center of the corporate governance discussion, can the good management of the companiespart of its board of directors. This accounts for the importance andresponsibilities of a board of directors.

It is the maximum governing body thatdirects the organization, ensures the control and supervision of the generalmanagement and must also establish where the company is going, how to make itsustainable in the long term, as well as choose and remove the chief executiveofficer (CEO)3.Therefore, it is a mistake to leave management in the hands of management andthat shareholders and board members are passive subjects in decisions. But itis even more worrying when the board of directors is mostly composed, not tosay completely by members of a single family, since the dependency is evengreater; so it is important to have the presence of independent members who cancontrovert the administration, in which the future of the company isconscientiously planned and not simply that it reviews the financial report,well remunerated, with internal and external evaluation mechanisms, supportcommittees and in-depth discussions. Now another problem is the soft law orsoft law, since most of the countries only have guidelines on this issue andnot with a strict regulation. 4Whatshows the lack of rigor in the design of regulations that define exactly howthe board of directors works, what are the responsibilities of its members andthe lack of adequate evaluation systems.5However, although awareness of the importance of the board is still verylimited and is more visible in some economic conglomerates and familyorganizations, there are more and more boards of directors made up of peoplewho can contribute to the business and who, even, they go beyond in thebusiness. As a Lynn Stout  said “As far as the law is concerned,maximizing shareholder value is not a requirement; it is just one possiblecorporate objective out of many6”,The process of maturingtowards a better design within the company includes a greater interest inlinking independent members; that is, people with prestige and reputation whoare not representatives of the controlling shareholder, or employees, orcustomers, who are not in the directory of a company that is a competitor, thatis, without conflicts of interest that prevent them from supporting thecompany.

In effect, when there is apositive environment in the Corporate Governance of the companies, investorsand foreign financing entities are more inclined to supply them with resources,and in this way they access in better conditions of the financial system andthe international capital markets. These markets usually provide betterfinancing conditions. International markets mold rules that, being benchmarksdemanded by those who participate in such markets, end up reflected in theperformance of corporate governance of companies. This is the case of guidelineson transparency and on the fulfillment of contracts, which are observed bycompanies in a country encourages business to this.

In effect, throughtransparency, shareholders and other resource providers will feel betterinformed to make better decisions; while greater security in the fulfillment ofcontracts will reduce the perception of risks in business. Likewise, a businesscontext of good Corporate Governance practices means the presence offinancially and economically better directed and stable companies; being lessprone to contagion than economic crises which occurs when a company in troubleaffects other companies and therefore prevents the effect of the possiblebanking crises, which when they occur affect us all to the deterioration of thesolvency of banks, harming the services they provide and putting at risk thedeposits we hold in them. One of the great lessons that international businessscandals leave behind, such as the collapse of Enron, Tyco, WorldCom andStanford, to name a few, is the need to have strong and professional boardsthat guarantee the durability of the business and not a simple space of goodfriends who applaud everything that the administration says or does2.However, when there is apositive environment in the Corporate Governance of the companies, investorsand foreign financing entities are more inclined to supply them with resources,and in this way they access in better conditions of the financial system andthe international capital markets.

. These markets usually provide betterfinancing conditions. International markets mold rules that, being benchmarksdemanded by those who participate in such markets, end up reflected in theperformance of corporate governance of companies. This is the case ofguidelines on transparency and on the fulfillment of contracts, which are observedby companies in a country encourages business to this. In effect, throughtransparency, shareholders and other resource providers will feel betterinformed to make better decisions; while greater security in the fulfillment ofcontracts will reduce the perception of risks in business. Also, a goodbusiness context Corporate Governance practices means the presence offinancially and economically better-targeted companies, being less prone tocontagion than economic crises can cause (when a company in trouble complicatesthe others), and therefore preventing the effect of any crisis banks, whichwhen they occur affect us all by reducing the solvency of banks, damaging theservices they provide and putting at risk the deposits we hold in them1.Even when companies act for their own benefit, their joint behavior through itsCorporate Governance practices influence the economy as a whole; which in turnimpacts the process of growth and development of a country.

 In addition, this typeof company is a magnet for attracting more qualified professionals who join themanagement or management of it. Likewise, a better management of CorporateGovernance by itself also implies that the company is better organized, plansbetter its objectives and strategies, and responds with more efficiency in itsprocesses. In a few words it becomes more solid and competitive. On thecontrary, a company with marked deficiencies in its Corporate Governance willhave serious difficulties in interacting with its counterparts in the differentmarkets. Their suppliers or their potential financiers will remain distrustfulof the operations of said company and as such they will perceive it as a riskysituation, before which they will refrain from trading with it, or in doing sothey will raise very severe financial conditions (immediate distribution ofdividends, immediate payment or very short terms, high interest rates,guarantee requirements, etc.

). Companies in these circumstances will remainpressed on a daily basis, and their chances of growth will be almost nil.

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