INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
CORPORATE GOVERNANCE AND CULTURE IN IRAN
Ali Rashidpur (PhD) Islamic Azad University, Science and research Branch, Department of Management, Isfahan, Iran Qader Vazifeh Damirchi (PhD Student)1 Islamic Azad University, Science and research Branch, Department of Management, Isfahan, Iran Moosa Zamanzadeh Darban (PhDStudent) Islamic Azad University, Science and research Branch, Department of Management, Isfahan, Iran
VOL 3, NO 6
Culture in general consists of values, ideas about what in life are important, norms, methods or sanctions of enforcing values, institutions, structures of a society within which values and norms are transmitted. The purpose of study is to search forthe basic characteristics of the relationships between the Iranian culture and the degree of implementing the principles of corporate governance in Iranian companies. The study involves an analysis and an assessment of corporate governance practices in Iran in terms of Iranian cultural concepts and dimensions. According to Hofstede Iranian society classified as high power distance, Individualism,Masculinity and high uncertainty avoidance.
Key Words: Corporate Governance, Culture, Governance, Iran
In the current economic climate much attention has been focused upon corporate governance and the failures in governance which have led to the financial problems experienced by many companies, and particularly financial institutions (Crowther, 2008). Corporate governance is theset of processes, customs, policies, laws, and institutions affecting the way a corporation (or company) is directed, administered or controlled (Larcker, Irvin,2011; Cadbury, 2011). An important theme of corporate governance is the nature and extent of accountability of particular individuals in the organization, and mechanisms that try to reduce or eliminate the principal-agent problem (Bowen ,1994). Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. In contemporary business corporations, the main external stakeholder groups are shareholders, debt-holders, trade creditors, suppliers, customers and communities affected by the corporation's activities. Internal stakeholders are the board ofdirectors, executives, and other employees. A related but separate thread of discussions focuses on the impact of a corporate governance system on economic efficiency, with a strong emphasis on shareholders' welfare; this aspect is
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INTERDISCIPLINARY JOURNAL OF CONTEMPORARYRESEARCH IN BUSINESS
VOL 3, NO 6
particularly present in contemporary public debates and developments in regulatory policy (OECD, 2011). As increasing company scandals, bankruptcies and auditing difficulties, managerial concepts were discussed again and it was tried to fill in the blanks. The term "corporate governance" has become widely used in recent years by these results. So, thenew management phenomenon that characterized by some of principles is considered as a way to overcome the problem of confidence in capital markets. Corporate governance is one of the pillars of companies’ focus on sustainability following environmental and social ones. The corporate governance framework also depends on the legal, regulatory, and institutional environment (Monks and Minow, 2008).In addition, factors such as business ethics and corporate awareness of the environmental and societal interests of the communities in which a company operates can also have an impact on its reputation and its long-term success. There are many international regulations that suggested some principles about corporate governance such as Cadbury Report, OECD Principles, Sarbanes-Oxley Act, etc. There...