Good Corporate Governance Explained
Subject: Management Paper 1
Good corporate governance refers to methods, laws, and policies that direct, control
and administers important functions of an organization. Principal stakeholders and board of
directors within the corporation are those who manage the principal corporation. Good
corporate governance ensures the goals of the management stays within the lines of
agreement of the stakeholders. most of the people think there's no difference between
stakeholders and shareholders during a corporation however, there's a difference which is
why it is vital to manage things correctly. While working toward maximizing shareholders
value and fairness, good corporate governance system ensures their rights are protected in the
least times. Since Enron and WorldCom were such failures for giant business, corporate
governance has reinforced its protection considerably. Stakeholders and shareholders alike
are driven to enhance corporate governance, although a number of these changes come from
federal mandates. What most stakeholders want is concise information with a transparent and
feasible link to overall business strategy.
Corporate efficiency is formed by good corporate governance and strengthens
employment stability, retirement security, and therefore the endowments of orphanages,
hospitals and universities. Good corporate governance structure specifies the distribution of
rights and responsibilities among different participants within the corporation, such as, the
board, managers, shareholders and other stakeholders, and spells out the principles and
procedures for creating decisions on corporate affairs. By doing this, it also provides the
structure through which the corporate objectives are set, and therefore the means of achieving
those objectives and monitoring performance. Good corporate governance is about promoting
corporate fairness, transparency and accountability.
