Question

Discuss the relevance of corporate governance. What does it look like? How can a company benefit from governance systems; i.e. what benefits are provided to decision makers? Provide an industry example of corporate governance that you have been involved in from research.

Answer 1

Ans) Corporate governence refers to the rules , the processes and the policies which governed a corporations and it helped to avoid the conflict of interest among the stakeholders.It helps in the distribution of the rights and responsibilities among directors , managers , shareholders, creditors , regulators etc.Corporate governence helps in deciding the policies to facilitate corporate affairs and avoid conflicts.Corporate governence also helps to formulate policies that will leads to the development of objectives and mission and vision of a corporation.It is because of the weak corporate governence that leads to accounting frauds and even the financial crisis of 2008.The corporate governence includes subjects like all the shareholders are to be treated equallyand fairly.The interest of the other stakeholders should be protected lije creditors, regulators etc.There should be transparency in finances and operations.These all will help to develop the goodwill of the firm and continuity of the operations .Integrity and ethical behaviour is also promoted in corporate governence .We can take the example of Apple inc which has maintained its reputation through corporate governence and that has created a unique brand image of Apple a safe workplace , transparency in dealings and finances.The shareholders have gained by this as the treatment is fair so as the other stakeholders.