Supporting Mechanisms of Corporate Governance - Essay Example

The corporate governance system of any region helps in protecting the organization before the occurrence of any huge disaster. Many mechanisms can be found supporting the development and implementation of a corporate governance system; however, regulatory and stakeholders are those significant mechanisms that act as the backbone of the structure of the CG system1. The reason behind such an important presence of corporate governance is its wide coverage of the areas that does not only include stakeholder interests and shareholder recognition but ethical behaviors of the organizations are also given much priority.

Therefore, under the light of a statement “Stakeholders and the regulatory authorities are considered to be a significant mechanism for ensuring good corporate governance”2 paper runs its aim to analyze the situation. The global financial crises are also the main concern of the paper that is being diagnosed as a drastic consequence of corporate governance failure.  As an adaptation of corporate governance is as important as the initial business plan of a company; therefore, paper can also be found suggesting proper adaptation and implementation of corporate governance plans, as sit keeps the organizations to run within systematic and defined standards.

The legal initiatives taken in the favor of corporate governance are also being investigated where the role of some private sector organizations is also studied. All the arguments are supported by authentic pieces of evidence, where two major global economies of the US and UK can be observed being dealt with special consideration. The role of stakeholder mechanism and role of regulatory mechanism in corporate governance are also analyzed along with locating the lacking elements in the system if any. After investigating the issue, some of the recommendations are also presented that might be helpful for the betterment of CG structure in different regions. 2. Corporate Governance is the broad phenomenon that represents a system, which serves in directing and controlling the companies.

There are many mechanisms that have been serving in establishing good corporate governance. An appropriate implementation of corporate governance demands the market and regulatory mechanisms, along with the maintenance of the relationship between the management of the organization. By considering recent common scenarios in business organizations, shareholders of an organization operate as a major external stakeholder group. However, in these organizations, internal stakeholders are their employees, board of directors and executives.