Corporate Governance : Effective And Trusted Corporation For The Shareholders

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Corporate governance is set of predetermined procedures and guidelines that the corporation should consider for creating effective and trusted corporation for the shareholders’ (financiers, customers, management, employees, government, and community) point of view. Shareholders are the individuals who have invested money into a business and expect a significant return on their capital. The main focus of corporate governance is to maximize the wealth of shareholders on long term basis. Improvement of corporate governance can be possible by including other stakeholder representatives on its board of directors. Stakeholders could act in a way that the company can be more responsible to the society at large in addition to maximizing earnings.…show more content…
The framework of the corporate governance outlines the duties, privileges and roles of the board members or directors to ensure that these individuals do not take advantage of the company’s resources. Most companies would also include information on the role of shareholders in the organization and their responsibilities for voting on any corporate issues. Corporate governance is also the way a corporation policies itself. The method is governing the company like a sovereign state, in stating its own customs, policies and laws to its employees from the highest to the lowest levels. Corporate governance is intended to increase the accountability of the company and to avoid massive disasters before they occur. Well-executed corporate governance should be similar to a police department’s internal affairs unit, weeding out and eliminating problems with extreme prejudice. The corporate governance mechanisms provide assurance that the people who sink in the capital will get back the return on this capital. Corporations or businesses would sometimes require shareholders’ approval when setting up their corporate governance framework. The shareholders’ approval would be required to ensure that the board of directors or executive officers understand how the company expects to generate financial returns. Shareholders’ would also have to approve any changes to the corporate governance framework or
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