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The role of corporate governance has, therefore, become increasingly vital to the strategic management of the organization and projection of its aims and objectives in the eyes of the public and other stakeholders.
Corporate governance can be broadly defined as the creation of business environment within and outside the organization that would effectively meet the challenges of the time and improve and improvise the productivity of the performance outcome. The lack of effective controls vis-à-vis malpractices in accounts and auditing, security of confidential information, corrupt practices in the higher hierarchy of management, disparity in rules and regulation etc. have become crucial risks factors that have resulted in huge economic loss for its shareholders as well adversely affecting its credibility in the market.
Hence, in the fast changing environment of globalization, business compulsions have become more stringent in their nature and factors like accountability, responsibility and reliability have become important pre-requisites for business to create a credible environment for their trade and investment. ‘Corporate governance framework should recognize the rights of stakeholders established by law or through mutual agreement..’ (Du Plessis, 2005, p.36). The key principles of corporate governance are described and ranked in order of importance as under:
‘Corporate disclosure to stakeholders is the principal means by which companies can become transparent’ (Solomon, 2007, p143). Thus, Corporate Governance promotes effective control measures to safeguard the interest of all its stakeholders, investors and business partners. Under the codes of corporate governance, the disclosure mainly relates to the policy of the company to disclose relevant information about its budgets, annual financial statements
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Quality of corporate governance within an organization (Shell Company) and the impact on organization’s key stakeholder
Shell Company operates globally across the world and is one of most successful company in energy and petrochemical products.
The interests of various stakeholders and shareholders were compromised by the vested interests. Roberts, McNulty and Stiles (2005) have emphasized the importance of board members of the company who are endowed with huge powers that could be easily misused.
Corporate governance also represents the pattern through which a company’s objectives are formed or formulated as along with ascertaining the means for achieving those and analysing the performance (Palacio & Johnson, 2006). Comvita is identified to be amongst the leading producers of natural health and beauty care products.
With respect to this, it ensures that the business is conducted in accordance to ethics. Such principles should be adhered to in the decision making process while giving the right honors to the laws of the land. Fundamentally, people develop a lot of confidence and would wish to be associated with an organization that is perceived to be practicing good corporate governance.
The UK model of corporate governance is based on the principle of ‘comply and explain.’ This system is rather flexible and appeals to regulators in other markets. Since early 1990s the corporate governance of the UK experienced a number of transformations
ants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs”. By doing this, OECD (1999) explains that corporate governance likewise “provides the structure
The introduction section gives general principles and concepts about corporate governance. The main body of the paper carries out a comparison of the UK and the US corporate governance models. It is divided into
Corporate governance can be understood through various frameworks of the firm. Agency theory is one of those frameworks, and entails the separation of ownership and control of an organisation. In this case,
More importantly, the chapter dwells on the procedures and methodologies that will be involved in working on the paper. 21
Corporate governance in general has become the new crucible in which corporations are tested and declared worthy of the trust of
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