CORPORATE GOVERNANCE

Corporate Governance
Corporate governance is the system by which companies are directed and managed.

Corporate governance influences: How objectives of a company are set and achieved; How risk is monitored and assessed; How performance is optimised.

Other definition
The Manner in which a Corporation is Run Achieving its Objectives Transparency of its Operations Accountability & Reporting Good Corporate Citizenship
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An Indian Definition
fundamental objective of corporate governance is the , enhancement of the longterm shareholders value while at the same time protecting the interests of stakeholders.
SEBI (Kumar Mangalam Birla) Report on Corporate Governance, January, 2000

MISSION
To enhance the world generating capability of the enterprise in the globalizing environment with accuracy & transparency with full compliance with the laws, rules & regulations that governed the company business.

MERITS OF CORPORATE GOVERANCE

Good corporate governance ensures corporate success and economic growth. Strong corporate governance maintains investors confidence, as a result of which, company can raise capital efficiently and effectively. There is a positive impact on the share price. Good corporate governance also minimizes wastages, corruption, risks and mismanagement. It ensures organization to managed in a manner that fits the best interests of all.

Principles Of Corporate Governance

Right & equitable treatment of shareholders. Interest of other stakeholders. Roles & responsibilities of the board. Integrity & ethical behavior. Disclosure & transparency.

If a country does not have a reputation for strong corporate governance practices ,capital will flow elsewhere . If investors are not confident with the level of disclosure , capital will flow elsewhere . If a country opts for lax accounts and reporting standards ,capital will flow elsewhere. All enterprises in that country suffer consequences. BY: ARTHURLEVITT (former chairman of U.S. security and exchange commission)