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What is corporate governance?:

What is corporate governance? Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources.

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The aim is to align as nearly as possible the interests of individuals, corporations and society The primary purpose of corporate governance is to create wealth legally and ethically. This translates to bringing a high level of satisfaction to five constituencies -- customers, employees, investors, vendors and the society-at-large.

Nature of Corporate Governance:

Nature of Corporate Governance Corporate Governance is concerned with the process by which corporate entities are governed. Corporate Governance is a way of life and not a set of rules. The basic element of good governance is transparency projected through good governance. Corporate governance is a multi-faceted subject.

Governance and performance:

Governance and performance Good governance leads to good performance It creates an open and transparent system It improves communication and breaks down systematic barriers to flow of information Good governance allows decision making based on data. It reduces risk Good governance helps in creating a brand and creates comfort for all stakeholders and society

Issues in Corporate Governance:

Issues in Corporate Governance Asymmetry of power Asymmetry of information Interests of shareholders as residual owners Role of owner management Theory of separation of powers Division of corporate pie among stakeholders

Benefits of Good Corporate Governance :

Benefits of Good Corporate Governance Having better access to external finance . Lower costs of capital . Improved company performance . Higher firm valuation and share performance . Reduced risk of corporate crises and scandals

Factor influence the corporate governance:

Factor influence the corporate governance 1. The ownership structure 2. The structure of company boards 3. The financial structure 4. The institutional environment

Problems of Corporate Governance :

P roblems of Corporate G overnance Demand for information Monitoring costs Supply of accounting information

Parties to corporate governance :

Parties to corporate governance Parties involved in corporate governance include the regulatory body:- Chief Executive Officer Board Of Directors Management Shareholders

Other Stakeholders who take part include:-:

Other Stakeholders who take part include:- Suppliers Employees Creditors Customers & Community at large

Principles of Corporate Governance:

Principles of Corporate Governance Rights & equitable treatment of shareholders Interest of other stakeholders Role & responsibilities of the board Integrity & ethical behaviour Disclosure & tranparancy

Internal Corporate Governance Controls:

Internal Corporate Governance Controls Monitoring by the Board of Directors Remuneration Competition Government regulations Managerial labour market Media pressure Telephone tapping External Corporate Governance Controls

Reasons why more interest in Corporate Governance:

Reasons why more interest in Corporate Governance To make the Directors realize that their main job is to represent the share holders and other stake holders To safeguard the interest of the shareholders To protect the interest of the shareholders Value creation for society Leadership values