INTRODUCTION
“CORPORATE GOVERNANCE”
The system employed to manage and guide the operations of a corporate entity, aiming to safeguard the interests of both individual and collective stakeholders.”
“Corporate Sins”
Among directors and senior managers, three common attributes are often identified as corporate sins: laziness, greed, and fear.
WHY IS CORPORATE GOVERNANCE IMPORTANT?
The significance of this area of study is primarily because a company is connected to the interests of many stakeholders, yet only a select few have the chance to safeguard their interests.
Support Capital Market
Effective corporate governance strengthens capital markets. Numerous research studies indicate that companies with superior governance can attract more affordable capital from both shareholders and lenders. Additionally, evidence from various global regions establishes a direct and positive correlation between a company’s governance quality and its financial performance, contributing to economic benefits.
Benefit for the economy:
When companies generally adhere to good governance principles, the entire economy experiences significant benefits. Good governance results in improved financial performance, fostering investment, stimulating growth, generating employment, enhancing the quality and variety of products, boosting government revenue, and ultimately improving the overall quality of life for the general population.
KEY TERMS INTRODUCED IN THE CHAPTER
Governance
Stakeholders
Shareholders
Management
Corporate Sins: Greed, Sloth and Fear
Importance of Corporate Governance
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