3.1 Corporate Governance in Public Sector
There is no universally agreed-upon definition for the term “public sector governance.” What is understood by the term appears to vary considerably between jurisdictions. Some common definition comprises of governance, including those that are public sector focused. Governance comprises the engagements put in place to ensure that the intended outcomes for stakeholders are defined and achieved (The Charted Institute of Public Finance & Accounting, 2013).
One of the most striking difference between the corporate governance in the Public sector and the private sector is difference in the ownership and control of firms that exist (Maher & Andersson, 1999). The public sector organizations are funded by the
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However, the transmission or translation of those corporate governance principles and instruments to a public sector with a different structure and different goals and objectives, is not very straightforward and very difficult to achieve (Spanhove & Verhoest, 2007). Additionally the transformation with can be very time consuming. The tendency of Good Governance in the public sector management can have an influence on the whole governance-system of the public …show more content…
These can bring a huge impact in the application of Corporate Governance in the Public sector making it a key difference between Private Sector and public sector. However the principles in the Public sector are similar, such as Integrity, Responsibilities towards the state or public, showing true and fair view providing value to the organization (Edwards & Clough, 2005).
The listed companies are required to do a financial audit by a certified auditor while in public sector this is done by the Auditor general’s office. These are measures that can be assessed objectively from externally available and verify information to be true and transparent. These can be known as good governance principles which helps in achieving the key principles of the corporate
"Principles of Corporate Governance." 2012. The Harvard School of Law Forum. Ed. Noam Noked. Web. 2 April 2014. .
Corporate gorverance as a system are directed and controlld by companies. Initially, their board of directors should take responsible for the gorverance of companies, which include setting strategic aims of companies , guarantee an effective leadership, supervising the proformance of business management and reporting on it to shareholders. The board's action should comply with the law, regulations and shareholders. In addition, the shareholders also play an important role in gorverance and they have right to decide who can be employed as the companies' directors and auditors to provide good governance structure for them. Therefore, corporate goverance can be regarded as what the board of a company does and how it sets the values of the company.
Bibliography: Turnbull, S. (1997). Corporate governance: its scope, concerns and theories. Corporate Governance: An International Review, 5 (4), pp. 180--205.
Kaboolian, L (1998) ‘the New Public Management: Challenging the Boundaries of the Management vs. Administration Debate.’ Public Administration Review 58(3): 189–93.
The public sector faces an increasing pressure to run government like a business; to be more cost efficient, as small as possible, competitive, entrepreneurial, and focused on customer satisfaction. When the focus shifts to incorporating business practices in public administration, the quality of the public service decreases and the interaction becomes less about a commitment to public service and more like the manufacture and marketing of a product.
Public sector reforms adopted in a number of countries such as USA, UK and New Zealand in the last fifteen years and characterised by efficiency units, performance management, contracting out, market type mechanisms, and agency status have come to be known as the New Public Management or NPM. Appearance of the NPM as shifting the paradigm from the old traditional model of administration has been promoted by a remarkable degree of consensus among the political leadership of various countries and is presented today as the major tool for public sector management reforms.
Corporate governance defined as the process whereby managers or directors of a company are being controlled and monitored during the decision making process, monitoring and accountability. Existence of corporate governance is to resolves problems which rises from the principal and agent relationship. This happen whereby the mangers are more interested in the private interest than maximise the value of the investors’ shares. Therefore, a question is asked whereby either internal or external audit contributes more in a company’s framework of corporate governance, and yet the answer is still unpredictable. Hence, research is carried out to investigate the contribution of each of the internal and external contribution accordingly.
M. Petrescu, e. a. (2010). Public Management: between the Traditional and New Model. Review of International Comparative 408 Management , 411.
This essay discusses the radical transformation of the principles and foundations of public administration from traditional to New Public Management. Firstly the essay will attempt to define the key terms of traditional public administration and the doctrine of New Public Management. Rabin J. (2003) explains that New Public Management embodies “a process in public administration that uses information and experiences obtained in business management and other disciplines to improve efficiency, usefulness and general operation of public services in contemporary bureaucracies.“Traditional Public Administration progresses from governmental contributions, with services perceived by the bureaucracy.
Public Administration involves the development, implementation and management of policies for the attainment of set goals and objectives that will be to the benefit of the general public. Since Public Administration involves taking decisions that affect the use of public resources there is often the question of how to utilize public resources for maximum public good. The National Association of Public Administration has identified four pillars of public administration: economy, efficiency, effectiveness and social equity. These pillars are equally important in the practice of public administration and to its success. This paper seeks to explain the role of each of the pillars in the practice of public administration.
Solomon, J (2013). Corporate Governance and Accountability. 4th ed. Sussex: John Wiley & Sons Ltd. p.7, p9, p10, p15, p58, p60, p253.
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,
Public administration is concern about the implementation of policy and to meet the government goals. Politics, performance and accountability are fundamental aspects among public administration. Politics refers to the political values that shape the administrative action. Performance considers the effectiveness and efficiency of the public administrator’s process. Meanwhile, accountability is the expectation of account-giving by the actions of the public servants, this depends of the political control over the administrator’s actions (Kettl, 2015). The American public administration is based on ten fundamental principles, which are focuses on effectiveness and accountability of the public servants. These principles are: i) implement the laws
Public Managers have to participate in the policy making process. Previously, according to scholars, “policy process” was considered “decision making” (Wu, Ramesh, Howlett, & Fritzen, 2010). Under such pretense, public managers considered their role merely with policy implementation. However the recent theories that define public policy, have demarcated public policy as an activity that involves a broad range of activities ranging from defining problems, ensuring the defined problems to make it to agenda, developing alternative solutions of addressing these issues, implementing the results and evaluating the outcomes.
...ion “Who governs?” leads quite naturally to two others: “Can one steer contemporary polities?” and “How can such steering be conciliated with the constraints of democracy?” Only in-depth research into the workings of contemporary public administrations can provide solid answers to these questions. Throughout the rest of this encyclopedia, definitions and interpretations of how governance fits, or fails to fit, with public administration provide valuable signposts with which to encourage social scientists to aim their empirical investigations in this direction.