Question

Why does corporate governance reform exist?

Answer 1

Reform in corporate governance deals with the rights and responsibilities of a company's management, its board of directors, shareholder and various stockholders. How well companies are run affects market confidence as well as company performance. Good corporate governance is therefore essential for comapnies that want access to capital. If comapny are well run, they will prosper. This in turn will enable them to attract investors whose support can help to finance faster growth. Poor corporate governance on the other hand weekans a company's potential and at worst can pave the way for financial difficulities and even fraud.

Purpose:

Corporate governance is about enabling organisations to achieve their goals, control risk and assuring compliance. Good coporate governance incorporates a set if a rules that define the relationship between stakeholders, management and the board of directors of a company and influence how the company is operating.