Question

Discuss corporate governance, its importance and the potential conflicts of interest.

Answer 1

Corporate governance :

1)means it is about fairness , accountability ,& transparency

2) it is concerned with structure & process for accountability ,decision making at the top level of organizaztion.

3) it deals with how to set organisation objective & to achieved it., how risk moniter & assessed and how to optimized the performance

4) objective of corporate goverance is transperancy , stakeholder satisfaction, employee participation ,overall to prepare enviroment which is ethically socially responsible organization .

5) refer to the set of rules ,policy put in place to dictate corporate behaviour

IMPORTANCE

1) CORPORATE GOVERNANCE ensure transparency which allow strong & susbstanable development.

2) IT assure that interest of all stake holder such as shareholder ,employee, customer ,supplier, government will be preserve

3) corporate governance is also important to share holder as it show company direction,good corporate governace help build investor trust which means a strong position in market

3)IT increase accountability so that it can avoid disaster before times.

conflict of interest

1) Is arise when a person has to select between his or organization interest

2) conflict of interest present in board level is serious problem as it may distort decision making

3) many corporation ask to declare conflict of interest before the board meeting

4) conflict of interest need not always be of money ,it can be ego , power sometimes for eg board meeting is very dynamic place where struggle of power & ego continuisly surface

5) conflict of interest where strong

6)Excessive shareholder right ( like in USA) also can lead to conflict of interest with director.& vice versa where the share holder is one of the stake holder , in these scenario it stop shareholder to ask for proctection of his right .

7) CONFLICT of interest ALSO arise when the duty of loyalty is compromised.