Corporate governance is most often viewed as both the structure and the relationships which determine corporate direction and performance. The board of directors is typically central to corporate governance. Its relationship to the other primary participants, typically shareholders and management, is critical. Additional participants include employees, customers, suppliers, and creditors. The corporate governance framework also depends on the legal, regulatory, institutional and ethical environment of the community. Whereas the 20th century might be viewed as the age of management, the early 21st century is predicted to be more focused on governance. Both terms address control of corporations but governance has always required an examination of underlying purpose and legitimacy. - - James McRitchie, 8/1999 http://corpgov.net/library/definitions.html
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 two. The owners must see that individual's actual performance is according to the standard performance. These dimensions of corporate governance should not be overlooked.
Corporate Governance deals with the manner the providers of finance guarantee themselves of getting a fair return on their investment. Corporate Governance clearly distinguishes between the owners and the managers. The managers are the deciding authority. In modern corporations, the functions/ tasks of owners and managers should be clearly defined, rather, harmonizing.
Corporate Governance deals with determining ways to take effective strategic decisions. It gives ultimate authority and complete responsibility to the Board of Directors. In today's market- oriented economy, the need for corporate governance arises. Also, efficiency as well as globalization are significant factors urging corporate governance. Corporate Governance is essential to develop added value to the stakeholders.
Corporate Governance ensures transparency which ensures strong and balanced economic development. This also ensures that the interests of all shareholders (majority as well as minority shareholders) are safeguarded. It ensures that all shareholders fully exercise their rights and that the organization fully recognizes their rights.
Corporate Governance has a broad scope. It includes both social and institutional aspects. Corporate Governance encourages a trustworthy, moral, as well as ethical environment.
Benefits of Corporate Governance
Good corporate governance ensures corporate success and economic growth.
Strong corporate governance maintains investors' confidence, as a result of which, company can raise capital efficiently and effectively.
It lowers the capital cost.
There is a positive impact on the share price.
It provides proper inducement to the owners as well as managers to achieve objectives that are in interests of the shareholders and the organization.
Good corporate governance also minimizes wastages, corruption, risks and mismanagement.
It helps in brand formation and development.
It ensures organization in managed in a manner that fits the best interests of all.
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Agency costs
1- board of directors 2- management 3- shareholders & stakeholders
the main difference between corporate governance and ethics is that the ethics are the philosophical and morally decent standards that a corporation attempts to stand by, while governance processes are the means by which a corporation attempts to remain as ethical as possible while still making a profit. The governance obligations and operations of a corporation vary depending on its type. For example, a sole-proprietorship--a business owned by a single person--has different financial necessities and legal obligations than a massive, publicly-traded corporation
Corporate Sector is a term used to describe a certain section of society. It can consist of companies, industries and businesses.
what is meant by corporate governance?
It means that corporate governance is a theoretical application of good practice but the quality of management is what would govern the quality of the governance in the final analysis as they would be responsible for ensuring it was applied.
corporate governance advantages and disadvantages
Walter Effross has written: 'Corporate governance' -- subject(s): Law and legislation, Corporate governance 'Corporate governance' -- subject(s): Law and legislation, Corporate governance
relevance to corporate strategy and corporate governance
What is the effect of corporate governance on foreign investment?
Corporate governance is key in implementing responsible corporate practices. This includes implementing practices that are in line with government regulations.
Corporate governance is for the accountability to shareholders, corporate social responsibility is for the accountability to remaining other stakeholders.
What is the synonym government.
6 step effective corporate governance
Kshama V. Kaushik has written: 'Corporate governance' -- subject(s): Corporate governance
Rashidah Abdul Rahman. has written: 'Effective corporate governance' -- subject(s): Corporate governance