These practices, if implemented properly, would enable the countries of the region to modernize corporate sectors, attract technology and foreign investment and thus boost the overall economic performance of the region.ĬSR is a firm-wide approach that defines how much an organization contributes back to the society and utilizes its available resources in a responsible manner, contributing to sustainable development through conveying benefits such as social, economic and environmental to stakeholders. Digging deeper, the banking and financial services sectors play a pivotal in the implementation of the mentioned CG performs as they provide the primary means of business financing. Moreover, sound CG practices have a direct effect on the economy they are capable of attracting investment to the MENA region, given that they improve efficiency of management in companies and decrease risk. Corporate values such as shareholder value, business ethics and corporate social responsibility (CSR) attract a lot of attention. These requirements coupled with a profound CG would allow both SMEs and societies to flourish. It is important to mention that accountability, social responsibility, transparency and fairness are factors required to operate in international markets. With their flexible structures, small to medium enterprises are capable of meeting various demands in diverse markets and even create economic activities. It is important to mention that these enterprises can contribute to the economic growth, employment, development, production and innovation ( Cansız, 2008). SMEs play a major role for economies both locally and globally. In such a significant region, SMEs seek to achieve and sustain innovation capabilities through the combination of inventive entrepreneurial processes which lead to the creation of new economic value. In the Middle East and North Africa (MENA) region, 85 percent of business entities are small to medium-sized enterprises (SMEs) and family-owned enterprises (FOEs) ( Saïdi, 2004), where CG practices have yet not reached a saturated level, and are still challenged by both external and internal factors. In this sense, morals and standards may vary according to culture and region. For a business to be considered ethical, it has to balance between both pursuing profit and fulfilling social responsibilities. While many interrelate CG with ethics and morals ( Trong, 2012), it is crucial to have an internationally acceptable guidelines and ethical behaviors upon building up a CG system. The presence of these traits is the duty of the management, the board of directors and the audit committee toward the investors and all other stakeholders. This requires three distinct characteristics in a company: accountability, responsibility and transparency. On the other hand, the ownership structure only does not guarantee an effective CG system. One such component is the ownership structure which mainly focuses on the board of directors’ practices and its established committees. Under CG practices, there lie several categories and components which usually indicate the level of CG in a company. As a result, the importance of CG and the awareness about it were rising in the last few decades with the aim to protect and secure all stakeholders interests while ensuring the company’s economic efficiency and leading to sustainability ( Crowther, 2008 Grant, 2003). The existence of CG governs the relationships between the management and the firm’s stakeholders ( Gebba, 2015). In a corporate setting, the implementation of an effective CG system is not as easy as it may appear, with ongoing challenges to maintaining it and reaching the desired goals. The topic of corporate governance (CG) has attracted multidisciplinary researchers from fields such as law, political sciences, accounting, finance, economics and even philosophy. #Philippine politics and governance cg fullThe full terms of this licence may be seen at: Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. #Philippine politics and governance cg licenseCopyright © 2018, Maheshwaran Gopalakrishnan License
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