The Impact of Socio-Cultural Environment in Corporate Governance

  • Aabir Shoaib
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  • Aabir Shoaib

    Student at Chandigarh University, India

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The importance of understanding the role of culture in corporate governance is increasing day by day on an exponential basis to say the least. Today, no structural study of corporate governance processes can be complete without taking into account the societal context in which they exist and operate in the business world which is consequently and intricately influenced by a variety of factors. Businesses do not live in a bubble, and even the most competitive must be mindful of shifts in the traditions and environments in which they operate. Businesses must grow to keep ahead of their rivals and still hold importance in the eyes of their customers as society and culture intertwine and evolve. This article offers an analysis of various perspectives on how society and culture interact with the law, particularly corporate law, to form corporate governance in alliance with socio-cultural factors, to help understand corporate governance in its diversity and persistence towards such factors. The fundamental principles of cultural interpretation are explained primarily, along with the fundamental principles of cultural analysis, as well as common ideas of cultural aspects and social networks as social capital. The Corporate Governance legislation is nothing more than a collection of laws designed to regulate the behaviour of a company and the persons that hold managerial positions i.e. board members. In a hypothetical perfect world, corporate governance laws can be converged across nations, regardless of cultural variations. However, this does not work in practise. Since Corporate Governance laws are essentially rules of behaviour, they must balance the "legal" with the "socio-cultural profiles of the society in which the rules must work. Thus this article reviews current research on the effects of culture on corporate governance on issues such as legal transplants, corporate objectives (corporate social responsibility), relationships with investors and other stakeholders through disclosure and dividend distribution, executive compensation, and the operation, composition, and network structure.


Research Paper


International Journal of Law Management and Humanities, Volume 4, Issue 3, Page 3523 - 3529


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This is an Open Access article, distributed under the terms of the Creative Commons Attribution -NonCommercial 4.0 International (CC BY-NC 4.0) (, which permits remixing, adapting, and building upon the work for non-commercial use, provided the original work is properly cited.


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