Q) Good Corporate governance is not just morally correct, but economically Do you agree. Discuss.
Structure:
What is corporate governance- 30 words
Why it is morally correct- 40 words
What is its economic benefit- 70 words
What is Corporate Governance?
Corporate Governance refers to the way a corporation is It is the technique by which companies are directed and managed.
It means carrying the business as per the stakeholders’ It is actually conducted by the board of Directors and the concerned committees for the company’s stakeholder’s benefit.
Good corporate governance is all about balancing individual and societal goals, as well as, economic and social
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
Corporate Governance clearly distinguishes between the owners and the
The managers are the deciding
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
This also ensures that the interests of all shareholders (majority as well as minority shareholders) are
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.
Economic Benefits of Corporate Governance
Good corporate governance ensures corporate success and economic
Strong corporate governance maintains investors’ confidence, as a result of which, company can raise capital efficiently and
It lowers the capital
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
Good corporate governance also minimizes wastages, corruption, risks and
It helps in brand formation and
It ensures organization in managed in a manner that fits the best interests of all.
