In: Finance
Critically evaluate the effectiveness of the rules-based and principles-based corporate governance with input from recent research findings
Corporate governance is the combination of rules process or laws by which business are operated regulated or control.Rules based approach to corporate governance is based on the view that companies must be required by law to comply with established principles of good corporate governance .The rules must apply some types of company.A principle based approach seeks to set principles that specify the intention of regulation rather than set rules detailing requirements of a financial institutions . The core principles of good corporate governance is accountability responsibility and transparency will usually outperform other companies and will be able to attract investors whose support can helps to finance further growth .The four pillars of corporate governance are people ,purpose,processes and performance . The advantages of rule based system is availability ,cost efficient and speed.