Question

In: Accounting

What is ‘corporate governance’? Provide examples to illustrate your answer.

What is ‘corporate governance’? Provide examples to illustrate your answer.

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Expert Solution

Corporate governance:- Corporate means 'Company' and Governance means ''rule and regulation' or " Rules and regulation of company". In easy word , Corporate governance is policy, rules and process to manage a corporate body. It is driving policies of company to guide it for achieving it's goals. Lot of Shareholder's interest are depends on company policy who are directly and indirectly connect with company. An effective and good governance assures stake holders like Shareholder, manager, customer, support, consumers etc for safety of their rights , duties and interest. A corporate body mainly managed by Board of directors which are appointment by shareholders . Board of director sets the internal policies ,rules , regulation and process to drive the company . A good corporate governance of companies depend of board of director . A good governance provide a Framework of attaining company goals , strong internal control to perfomance measurement and corporate intrigity .Good corporate governance make company reputation,goodwill , reliability, transparency for public figure. Some examples of corporate governance,

(a):- Management of finance and fund :- Fund is back bone of the business body. If there is weakness in concerned policy ,no business can run long term . Board of directors should sets the finance policy such way that all transactions should be transperent for related stakeholder. Its should be properly reporting of fund in weakly , monthly, quarterly, half yearly , annually whatever suitable for business size. Stakeholder should be allowed to reach the report without any restrictions if stakeholders interest are connected .

(b):-​​​​​​ Hiering policy of company:- Board of director should prepare the Hiering policy effectively and should be elobrarated properly the limit of company employees according to their position.policies should be fulfill the government Rules of transparency , impartiality in hiering process to make strong public relationship.

(c):- Stakeholders dispute settlement policy :- Shareholder, serior manager, director , employees , supplier, customer etc are directly or indirectly interconnceted each other . There is always dispute occurs between them in concerned of their interest. There should be effective policy to solved their issue by transparency and impartiality.

(D):-​​​​​​ Conflict of Interest policy:- Some times the company's board member, partner , Shareholder, senior managers and other employees takes wrong advantage of their post and position. They should sign an Statement of Conflict of interest policy as part of corporate governance to fixed thier limit, right and duties . It should be clear that what step will taken in case of break the policy rule .


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