Corporate governance options for the local subsidiaries of multinational enterprises

Kiel, Geoffrey C., Hendry, Kevin and Nicholson, Gavin J. (2006). Corporate governance options for the local subsidiaries of multinational enterprises. In: C. A. Mallin, Corporate Governance: An International Review. 8th International Conference on Corporate Governance and Board Leadership, United Kingdom, (568-576). 11–13 October 2005. doi:10.1111/j.1467-8683.2006.00531.x


Author Kiel, Geoffrey C.
Hendry, Kevin
Nicholson, Gavin J.
Title of paper Corporate governance options for the local subsidiaries of multinational enterprises
Conference name 8th International Conference on Corporate Governance and Board Leadership
Conference location United Kingdom
Conference dates 11–13 October 2005
Proceedings title Corporate Governance: An International Review   Check publisher's open access policy
Journal name Corporate Governance-An International Review   Check publisher's open access policy
Place of Publication United Kingdom
Publisher Wiley-Blackwell
Publication Year 2006
Sub-type Fully published paper
DOI 10.1111/j.1467-8683.2006.00531.x
ISSN 0964-8410
Editor C. A. Mallin
Volume 14
Issue 6
Start page 568
End page 576
Total pages 9
Language eng
Abstract/Summary While the corporate governance literature generally focuses on the parent legal entity, many organisations are now multinational enterprises (MNEs) with subsidiaries that are most often legal entities in their host countries. Despite the strengthening of corporate governance regimes internationally, the boards of these subsidiaries are in many instances perfunctory. This paper examines the question of whether developments in corporate governance theory and practice can add value for the local subsidiaries of MNEs. This paper provides a theoretical basis for evaluating governance models in MNEs. The paper commences with a review of the key concepts from the MNE and conglomerates literature with respect to core MNE strategies. The paper then discusses what the "governance roles" are that must be performed in MNE subsidiaries. We propose four governance frameworks for subsidiary corporations. These frameworks are: (1) Direct Control; (2) Dual Reporting; (3) Advisory Board; (4) Local Board. We consider the strengths and weaknesses of each model in relation to international strategy theory. We conclude with recommendations for the conditions under which the various models may be appropriate and practical guidelines for the utilisation of corporate governance theory to improve MNE performance.
Subjects C1
350208 Organisational Planning and Management
720403 Management
Keyword Corporate governance
multinational enterprises
subsidiary companies
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

 
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Created: Wed, 15 Aug 2007, 05:40:42 EST