Introduction: Corporate Governance deals with a set of rules and regulations that are prescribed for directing the company’s affairs. It controls a company or an organization by ethics, values, principles etc. The board of directors of the company is responsible in ensuring effective corporate governance by working for the company’s interest in the broad sense. Corporate governance took its initial phase in India during the economic liberalization in 1996 and the need for corporate governance increased with the changing business environments all over the world.
As a matter of fact, corporate governance is there in India since 4th century B.C (Muniapan, 2007). Kautilya’s arthashastra highlights the corporate governance made in ancient India
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Organizations were not following proper standards of reporting their financials which is causing heavy losses for the stakeholders. Some of the international companies like world com of US, Xerox of Japan have collapsed due to lack of good corporate governance and unprincipled practices embraced by the management. These implications made the separation of power between the board of directors of a company and the management where the board of directors is free to make policies that is necessary for good governance.
Securities and Exchange board of India (SEBI) had clearly understood the importance of corporate governance and it appointed several committees headed by Kumar Mangalam Birla, Naresh Chandra and Narayana Murthy (Sharma, 2010). These committees have given recommendations for effective corporate governance in the organizations such as improving the quality in financial disclosures, following the code of conduct, strengthening the audit committees
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At the global level, it can also help the company to attract foreign investment because many international companies have failed miserably due to lack of transparency in financial disclosures to the public. In addition to this, foreign investments are equally important for a company to perform better in today’s scenario as the money flows internationally and large number of investors from different countries infuse their
During the late nineteenth century, the court and the constitution blatantly favored large corporations. They did this through the interpretation of the United States Constitution, particularly the Fourteenth Amendment, as it pertained to corporations. This led to the decision regarding the Wabash vs. Illinois case and in turn to the creation of Interstate Commerce Commission.
Money is power, and we live in a capitalist society; possessing a great number of money comes with a large amount of power, and one could do just about anything with the two. As of 2011, corporations hold $2 trillion. Corporate elites own most of the money in America, thus giving them control. A corporate elite is the owner, director and senior executive of the largest and most important of a nation's business corporations. A corporation is a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law Corporations were initially created by the people, and for the people.
Some investors are wary about the process of investing internationally, carrying the concept that it is always to precarious and complex. While there are risks involved with international investing, there are also very beneficial and profitable reasons for doing so. Ev...
Corporate governance implies governing a company/organization by a set of rules, principles, systems and processes. It guides the company about how to achieve its vision in a way that benefits the company and provides long-term benefits to its stakeholders. In the corporate business context, stake-holders comprise board of directors, management, employees and with the rising awareness about Corporate Social Responsibility; it includes shareholders and society as well. The principles which...
Bibliography: Turnbull, S. (1997). Corporate governance: its scope, concerns and theories. Corporate Governance: An International Review, 5 (4), pp. 180--205.
The end of 2001 and the start of 2002 saw the end of a period of magnified share prices and booming businesses. All speculations of misrepresentation came to light and those firms which once seem unconquerable were now filing for bankruptcy. Within this essay, I shall discuss the corporate governance mechanisms and failures which led to the Enron scandal resulting in global corporate governance reforms being encouraged.
Organizations that only have top management as the board members are more susceptible to accounting malpractices. Members of the board should preferably own shares in the company to ensure diligence when it comes to the interests of the company. Apart from the Board of Governors, there should also be an audit committee in place to oversee the financial dealings of the bank. Members of the board and the audit committee should have basic financial knowledge. Some of the members should also be experts in finances so that they can detect any anomaly that may take place in terms of financial reporting. An overhaul of the regulatory framework is required to empower authorities to intervene immediately, and make improvements. New technology is required. Manual antiquated processes should be eliminated because this causes greater human error and poor
Managerial accounting has changed over the years. Managerial accounting focuses on more than the financial aspect. We will be looking at how managerial accounting affects the business world today. Business also look to the economy, federal taxes, and the financial market so it can make the best decisions for their business.
The Asian Financial Crisis which exposed the corporate governance weaknesses was a wake-up call for all the policymakers, standard setters as well as the companies (OECD, 2014). The parties that involved and affected from the crisis started to realize the importance of having strong corporate governance practices in their countries. Consequently, the Asian economies along with the OECD established the Asian Roundtable on Corporate Governance in 1999, in order to support the enhancement of corporate governance rules and practices (OECD, 2014).
Nottingham Trent University. (2013). Lecture 1 - An Introduction to Corporate Governance. Available: https://now.ntu.ac.uk/d2l/le/content/248250/viewContent/1053845/View. Last accessed 16th Dec 2013.
1. Corporate Law for Ontario Business (2012). Farah Jamal Karmali 2. Business Dictionary (2010). http://www.businessdictionary.com/definition/separate-legal-entity.html
Today in the present world, most countries have the core object of governance in the “public good provisioning ” leitmotif. According to the main principles ; accountability, participation and transparency, from the governance ecology interaction between the State, Civil Society and Market –place, within the global-village environment, (Higgot and Ougaard 2002; Stiglitz 2003; Woods 2006) “Governance Deteriorate the Economical Progress of the Developing Countries”(Box 15.4 Kaufmann, Kray, and Mastruzzi, 2008 p 291 Governance Matter Vll: some leading findings). In my opinion governance on itself without parametric recognition is doomed to fail, instead of reflecting to new mechanisms of responsibility to steer and guide the social and economical issues, which I will try to clarify in the upcoming body breakdown. Governance is supported as structure through institutions, as process through instruments and as agenda through elements of good governance, generating the capacity to improve significant development and positive impact of economic growth and to cut back destitution. Despite of the fact that developing countries can come in line with the quality of governance by accepting it as a crucial determinant of developmental performance, it didn’t came into effect. The underlying fact of weak and poor governance was identified as a result, for not effectuating the measureme...
Accounting aids the government and organisations in decision making for their financial stability. This numerical data helps solve real life problems and contributes to how the economy and businesses perform.
The office of the Director of Corporate Enforcement (ODCE, 2015), Ireland defines Corporate Governance as “the system, principles and process by which organisations are directed and controlled. The principles underlying corporate governance are based on conducting the business with integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions and complying with all the laws of the land”. It is the system for protecting and advancing the shareholder’s interest by setting strategic direction for the firm and achieving them by electing and monitoring the capable management (Solomon, 2010). It is the process of protecting the stakes of various parties that have their interest attached with a company (Fernando, 2009). Corporate governance is the procedure through which the management of the company is achieving the goals of various stake holders (Becht, Macro, Patrick and Alisa,
1. This report seeks to prepare an explanation of what is meant by responsible business. It will be focused on a responsible business topic and also the nature and the importance of it will be discussed as well. The first responsibility of a business is how to gain and increase its profits. This is essential for a business in order to be healthy. So this report will show and explain what a Responsible Business is really in nowadays and how they operate under some circumstances. Then will follow an explanation and evaluation of the role of the government as an influence on responsible business behaviour. After that it continues with a review and evaluation of influences of ethical businesses approaching to responsible business.