Corporate Governance : Good Business Management

Corporate governance is the rules in which companies are controlled. This governance essentially balances the

“While corporate governance may not dictate the economic prospects of developing countries, it certainly plays an integral role in shaping them.”

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

Corporate governance is a commonly used phrase to describe a company’s control mechanisms to ensure management is operating according to

The article is written to help readers gain a solid understanding the roles of corporate governance, both inside and outside the company. Its goal is simply to impart information, not make claims or arguments on its own. I will be judging it mainly on the sources gathered, numerous examples and explanations given and the overall effectiveness it possesses in effectively communicating its ideas.

Corporate governance is the set of processes, customs, policies, laws and institutions, which directed, administered and controlled over the corporation (Monks & Minow, 2008). Corporate governance is a way by which a company governs itself for providing the values to their stake holders. The WorldCom did not follow the corporate governance policy. If the WorldCom would have followed the corporate governance it would have not led towards this business failure and company would have not gone for the unethical practices conduct in the organization. Corporate governance would have increased the faith of stakeholders towards the company and company would have survived for long time (Monks & Minow, 2008).

The concept of Governance is simple the system designed to control and distribute power within an organization. According to Hoel (2011), good corporate governance involves having a good leadership structure and the complex system of incentives, checks and balances that makes sure that the organization creates long-term

1. This article focuses on the Gompers, Ishii, and Metrick (GIM, 2003) study which found that strong shareholder rights lead to higher stock price returns and thus value. This is a great indicator that good governance has a direct effect on the performance of the firm. The article finds that corporate governance has a positive impact on the firm / management / shareholders. However good governance is not always the correct metric of evaluation for firms and boards. The primary finding of the article is from an economic analysis defending the relation between corporate governance and performance. This article examines the relationships among corporate governance / corporate performance / capital structure / and corporate ownership structure. Many of the past studies have taken into consideration only one measure of governance, while this study focused on seven different governance measures. The article also looks at the performance of a firm and the relationship it has with management turnover or disciplinary actions required.

Agency theory relative to corporate governance assumes a two-tier form of firm control: managers and owners. Agency theory holds that there will be some friction and mistrust

Corporations control a large part of the recourses of this planet and they are major form of economic organization. That is why our lives are affected by how corporations are managed. Decisions made by the people who run corporations not only impact the lives of individuals directly involved with the particular corporations but also has a much wider impact in the society. That is why corporate governance is significant because in simple term corporate governance means how a corporation is directed and controlled (Cadbury Committee, 1992, introduction).

Corporate governance is an increasingly important topic in this age of globalisation, it is a global occurrence which in turn makes the subject complex, with issues of ownership, cultural, legal and other structural differences being involved. From this broad scope, it is discernible that the functions of the board are inseparable from the topic of corporate governance and in turn what effect these have and will potentially have on the share price in the future.

Corporate governance can be defined as the process, customs, laws by which the affairs of a company are managed and controlled it also

Corporate governance is the rules and systems, based on which a company is run. These systems are put in place to ensure that a company always runs in the best interest of its stakeholders such as shareholders, management and customers. These rules prevent managers in an organization from participating in a self-interested manner that could be damaging to the company and its stakeholders.

Corporate governance is a broad operation concerned with choosing the board of directors and with setting the long run objectives of the firm. This means managing the relationship between various stakeholders in the context of determining and controlling the strategic direction and performance of the organization. Corporate governance is the process of ensuring that managers make decision in line with the stated objectives of the firm.

Corporate Governance refers to the way a corporation is governed. It is the technique by which companies are directed and managed. It means carrying the business as per the stakeholders’ desires. It is actually conducted by the board of Directors and the concerned committees for the company’s stakeholder’s benefit. It is all about balancing individual and societal goals, as well as, economic and social goals. Corporate Governance is the interaction between various participants (shareholders, board of directors, and company’s management) in shaping corporation’s performance and the way it is proceeding towards. The relationship between the owners and the managers in an organization must be healthy and there should be no conflict between the