International Financial Management Corporate Governance

Question: Discuss about the International Financial Managementfor Corporate Governance. Answer: It is a system which encourages a company to achieve the targeted objective to create the shareholder value through innovation and exploration and also emphasis on increasing economic performance. Thus, it is a business oriented with the objective of making strategic decisions on corporate affairs and focusing on regulatory requirements (ASX, 2003). Below are the discussions for some real events which relate to corporate governance scandal: Toshiba Accounting Scandal: Toshiba was a leading corporation in Japan and also a leader of corporate governance but during period 2008 2014, it was found that there is a huge reduction of PBT of Yen 224.8 billion which was the biggest erosion of the brand image in 140 year of history and this was mainly due to top executives who wants to make the company look good to outsiders. Now after this scandal, Tokyo Stock Exchange has put condition on listed companies to employ at least 2 outside directors so that they monitor the abuses carried out by top executives of the company (Kazuo, 2015). Thus, it observed that it was mainly due to improper actions taken by top executives of the company which has led the company in huge loss. Volkswagen Emission Scandal: Volkswagen was the market leader in the opening first six months having sold 5 million vehicles and beat the records of Toyota. But in September 2015, it was found that engineers of VW have installed software in diesel cars which was spilled out to 10 - 40 its emission limits. This has caused biggest damage to the industry affecting 11 million cars and paid $40 billion as fines and penalties. This scandal has highlighted the need for corporate governance because it highlighted the actions of top executives who involved in misconduct or who have failed in incorporation of proper management (Timms, 2015). Hanjin Shipping Scandal: Hanjin was a powerful Koreas shipping industry but was declared as bankrupt in 2016 of $7.62 billion and around 141 ship banned from docking in US, China etc. (Anonymous, 2017). This scandal was due to improper management who has no idea of managerial capabilities. Thus, top executives must have clear view about the companys operations. Thus, because of the improper corporate governance in the above companies they had faced the biggest failure which destroyed their image and brand in the history of all times. Conclusion It can be said that Corporate Governance is very important for the MNEs as it reduces the chances of frauds, scandals, criminal liability etc in the company and also helps in smooth functioning of the business. In other words, it can be called as benchmark of companys operations. References Anonymous. (2017). Hanjin Saga reveals South Koreas corporate governance flaws. Retrieved on 17 April 2017 from https://www.japantimes.co.jp/news/2017/02/16/business/corporate-business/hanjin-saga-reveals-south-koreas-corporate-governance-flaws/#.WPTFAIVOLmQ. ASX corporate governance council. (2003). Principles of good corporate governance and best practice recommendations. Retrieved on 17 April 2017 from https://www.asx.com.au/documents/asx-compliance/principles-and-recommendations-march-2003.pdf. Kazuo, M. (2015). Toshiba accounting scandal highlights issues in corporate governance. Retrieved on 17 April 2017 from https://www.nippon.com/en/in-depth/a04802/. Timms, M. (2015). The Volkswagen scandal: what next for the troubled company? Retrieved on 17 April 2017 from https://www.europeanceo.com/business-and-management/the-volkswagen-scandal-what-next-for-the-troubled-company/.