Corporate governance has undergone tremendous growth in the last decade. Many countries have pronounced corporate governance codes with exemplifies good corporate governance. This recommendations are geared towards achieving transparency and accountability. U.S and U.K views corporate governance solely from the perspective of wealth maximization for shareholders. On the other hand Japanese companies and some other countries has gone further to give corporate governance a broader definition which includes employees, customers, suppliers and shareholders satisfaction.
Corporate governance is deliberate and sustained efforts by the firm to update, improve, systematize and adjust its internal regulations and guidelines. World over corporations have been under sustained attack for continued improvement in performance at expense of moral or social issues. Good corporate governance involves financiers and other stake holders of an entity getting value for their investment. This, therefore, can be viewed from agency perspective where the ownership and control is separate. An ideal corporate governance practice does not only involve the fight between shareholders and directors but the ethos of an entity and achieving its set goals. According to Shleifer and Vishny (1997) the core objective of corporate governance in which mostly applies to Anglo-American companies, involves design of incentives which will maximize return on equity given that the ownership and control is separate.
According to ASX Corporate Governance Council (2003) the basis of good corporate governance involves solid foundation for management and oversight, promotion of responsible and ethical decision making, integrity in financial reporting, safeguarding right...
... middle of paper ...
...erse control rights and ownership separation. The company should clarify and let the public understand the roles and responsibilities of the board of directors.
In conclusion good corporate governance aims at minimizing risks in firms through establishment of synergies among stake holders .The fundamentals of which involves proper selection of the board of directors as well as proper definition of their roles. The board of directors are the ones responsible for defining the company strategies since all companies experience uncertainties which can be minimized through keeping abreast with modern business governance issues. Apart from the risks management companies will remain competitive worldwide by adhering to fair trade practices, consumer rights, environment and pollution controls, and employment acts and proper disclosures of information to all stakeholders.
The corporation’s business is carried out by its management, under the direction of the Board of Directors. The Board, and each committee of the Board, has complete access to management. Also, the Board and committee member’s has access to independent advisors as each considers necessary or appropriate. Mallor, Barnes, Bowers, & Langvardt (2010) state that the Board of Directors also, issues shares, Adopts articles of merger or sha...
Strong corporate governancethis company believes in order for a business to have strong performances they have to have good corporate governance. They strive to be transparent in their governance practices and policies. They also strive to be responsive to their shareholders while managing the Company for long-term success.
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.
Each party plays his parts – Role of key players like owners, Board of directors and staffs
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
Tsui, J., & Gul, F. A. (2002). Consultancy on a Survey on the Corporate Governance Regimes in Other Jurisdictions in Connection with the Corporate Governance Review. Hong Kong: CityU Professional Services Ltd.
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.
Capitalism is an economic system in which the production and distribution are privately owned, the government involvement is minimal,and there is free enterprise. In Capitalism, the means of production are privately owned and operated for profit in a competitive market. Also the economic investment, ownership and profits are all owned by individuals. Under capitalism the state is separated from the economy, which means that the government has no role in business. In other words, everyone works for themselves. The market forces in a capitalist country runs by supply and demand which it determines the price and later on it turns into profits. Supply is the quantity of goods and services a business is willing to sell, while Demand is the quantity of goods and services consumers are willing to buy. Therefore, Capitalism is the best economic system because it rewards the ones that work hard and since the government does not control trade, there is a large variety of goods and creates options for consumers to fit their personal needs.
The name of the company is most important. Usage of approved name entitles the company to enter into contracts and make them legally binding. This name should be prior approved under Section 4 and printed under Section 12 of the Act. Thus, if any representative of the company collect bills or sign on behalf of the company, and enter in incorrect particulars of the company, then such persons are to be held personally liable.
..., S. A., & MEERA, A. K. (2013). Let's Move to "Universal Corporate Governance Theory".. Journal of Internet Banking & Commerce, 18(2), 1-11.
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,
Other good corporate governance practices that overlapped with social responsibility is complying with applicable laws, setting good labor conditions for employees, providing good products to the community, helping the economy through fair trade practices, paying taxes and other obligations due to the government, making commitments to other persons, natural and juridical alike.
...eve efficient resource allocation. Failure to achieve appropriate and efficient corporate governance could result in sub-optimal allocation of resources, abuses and theft by management, expropriation of outside shareholders and creditors, financial distress and even bankruptcy. While evaluating the role of corporate governance, it is imperative to also consider the levels of development of market institutions and other legal infrastructure including laws and enforcement that provide good standard for investor protection as well as ownership structures.