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Corporate governance is the set of processes, customs, policies, laws, and institutions
affecting the way a corporation (or company) is directed, administered or controlled.
Corporate governance also includes the relationships among the many stakeholders
involved and the goals for which the corporation is governed. In simpler terms it means
the extent to which companies are run in an open & honest manner. Corporate
governance has three key constituents namely: the Shareholders, the Board of Directors
& the Management. Other stakeholders include employees, customers, creditors,
suppliers, regulators, and the community at large. It emphasis, accountability,
transparency & fairness in the management of a company by its Board, so as to achieve
sustained prosperity for all the stakeholders.
The current project aims to understand the concept of Corporate Governance, its
importance and study the ill effects of bad Corporate Governance. The study will focus
on the Corporate Governance practices followed in India with special reference to the
failure of Corporate Governance in Satyam Computers. The study finally attempts to
suggest measures for an ideal Corporate Governance
From the study it is found that the relation between corporate governance and
organizational performance is of fundamental importance to practitioners, academics and
policy makers. Assumptions and strongly held beliefs about the importance of
governance are shaping the current regulatory climate for the design of governance
structures. In this study, we have developed through a comprehensive analysis a very
high positive relationship between level of Corporate Governance and market valuations
of the company which indicates that superior governance results in better valuations.