How do corporate governance issues affect managers and their behavior?

Expert Solution

Yes, it is true that corporate governance affects managers and their behaviour. As we know that corporate governance helps in handling issues between interests between managers and shareholders. We practically see that there are always a clash between interests of managers and interests of shareholders and corporate governance suggest managers to prefer interests of shareholders over interest of managers because interests of the shareholders are treated as interests of the firm. That is why it is true that corporate governance affects managers and their behaviour all the time and due to such we achieve objectives of the firm and fulfill personal interests of the managers also.

Apart from this corporate governance affects managers to fulfill social objectives of the firm also so that managers can work in achieving social objectives of the firm and we know that when social objectives are fufilled then it will help in getting interests of the shareholders and interests of the managers as well.

Thus, it is quite clear that corporate governance affects managers and their behaviour.

ekkarill92 answered 2 years ago

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