The Rules and Principles of Corporate Governance Essay

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Corporate governance often refers to a set of rules and principles by which a company is directed. It provides a guideline for directing a company in order to fulfil its objective, brings added value to the enterprise, and is beneficial to the shareholders in long-term. (1) The rules and principals of corporate governance to an extent might be different in various companies, but some of these rules are similar in all the firms; such as accountability and responsibility towards the shareholders and commitment to conducting business in an ethical manner. (2)
Family-owned companies are the leading form of business in many countries. In Middle East, over eighty percent of the businesses are either owned or run by families (3). In Latin
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Corporate governance often refers to a set of rules and principles by which a company is directed. It provides a guideline for directing a company in order to fulfil its objective, brings added value to the enterprise, and is beneficial to the shareholders in long-term. (1) The rules and principals of corporate governance to an extent might be different in various companies, but some of these rules are similar in all the firms; such as accountability and responsibility towards the shareholders and commitment to conducting business in an ethical manner. (2)
Family-owned companies are the leading form of business in many countries. In Middle East, over eighty percent of the businesses are either owned or run by families (3). In Latin America, Brazil, over 50 percent of the largest companies (more than 100 corporations) are family-controlled (2). A significant number of all the family businesses have been created in 1950s or early 1960s that means they are going to experience a generational change over the next five to ten years. There is no need to mention that a generational change makes corporate governance more essential for family-owned enterprises.
As the time passes, a business goes through different stages; initiator, 2nd generation, 3rd generation and so on or as Harvard professor John Davis, according to Family Business Challenges (2) puts them, founder stage, siblings’ partnership, cousins’ confederation, etc. During the founder stage, normally a single person,
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