Financial or Economic Systems Essay Example | Topics and Well Written Essays - 2500 words - 1

Financial or Economic Systems - Essay Example This paper illustrates that the collapses of 2008 resulting from the financial crisis were critical in pushing the button for corporates to alter corporate actions and restructure to access a wider market. It also alarmed governments to initiate radical reforms of existing corporate governance to salvage the situation. Transitory states awoke to the realization that the privilege of investors inclined to companies and economies that implement sound corporate governance. In relation to this, the challenge of the industry is double-edged: the harmonization of corporate governance to universal standards and the improvement of competitiveness to enhance the attraction of more investment. A great diversity exists in both the status of corporate economic systems and the measures to enhance them in most countries. Presumably, the stated diversity is a reflection of the variegated circumstances of every country. The circumstances include the development state of a nation, the relationship be tween government and business, the financial structure inclusive of funds procurement structures, the shareholding structure and the market for talent among others. Of interest are the commonalities that surface in the direction of system improvements. To say, the direction of enhancement in governance via mutual supervision and the improvements in mechanisms to this end is a typical feature in most countries with most countries endeavoring to enhance corporate systems. All this aim at maximizing long-term corporate value based on the perspective of an array of stakeholders. Nevertheless, it is worth noting that the approaches to enhancing corporate governance differ in relation to a country's economic ideology as earlier mentioned. For instance, a capitalistic economy would approach governance from a different viewpoint compared to a command-based economy. From theory, it is widely known that command economies dictate that the government makes the decision on the goods and service to be produced, coupled with their distribution. In this economy, government officials evaluate the needs and resources of the country or state and allocate or distribute the resources according to the evaluation. Arguably, rather than a hedge on the requirements of individual consumers, service and goods delivery inclines to aggregate needs.