The Global South in Comparative Corporate Governance

This chapter situates the Global South in current debates on comparative corporate governance, with a special focus on the “BICS” (Brazil, India, China, and South Africa). The BICS now boast higher levels of stock market capitalization as a percentage to GDP than the four largest Global North economies, and their firms are also increasingly integrated into Global North markets. However, traditional views on corporate governance in the Global South have either assimilated the South into Global North categories (such as legal families) or have had a narrow focus on failures in legal transplantation or in ensuring investor protection. New ways of thinking about the Global South are emerging, however. Those have identified institutional innovations and adaptations in corporate laws in the Global South that account for local realities, especially in incorporating concerns about stakeholder protections and inequality.

Global South legal systems are also increasingly a prominent driver of corporate law and governance trends around the world. While in earlier decades Global South jurisdictions sought to mobilize the United Nations (UN) to regulate multinational corporations, more recently the UN has sought to mobilize corporations to mitigate regulatory gaps in the Global South. Concerns about regulatory gaps in the Global South with respect to human rights and environmental protection have helped inspire global trends in corporate governance such as the ESG movement and human rights due diligence, thus contributing to the resurgence of stakeholderist proposals and reforms in the Global North. Interestingly, the growing interest in stakeholder-oriented approaches in the Global North can also be interpreted as a form of “reverse convergence” in comparative corporate governance, with various institutions of the Global North coming to resemble their Global South counterparts.