QUESTION 2:
~What Is The Definition Of
Corporate Governance ?~
The framework of rules and practices by
which a board of
directors ensures accountability,
fairness, and transparency in
a company's relationship with its all stakeholders (financiers, customers, management, employees, government,
and the community).
The corporate
governance framework consists of :
(1) explicit and implicit
contracts between the company and
the stakeholders for distribution of responsibilities, rights,
and rewards,
(2) procedures for
reconciling the sometimes conflicting interests of
stakeholders in accordance with
their duties, privileges, and roles.
(3) procedures for proper supervision, control, and information-flows to
serve as a system ofchecks-and-balances.
Also called corporation governance.
See also Cadbury rules and governance.
Investopedia explains 'Corporate Governance' :
Corporate
governance became a pressing issue following the 1992 introduction of the
Sarbanes-Oxley Act in the U.S., which was ushered in to restore public
confidence in companies and markets after accounting fraud bankrupted
high-profile companies such as Enron and WorldCom.
Most
companies strive to have a high level of corporate governance. These days, it
is not enough for a company to merely be profitable; it also needs to
demonstrate good corporate citizenship through environmental awareness, ethical
behavior and sound corporate governance practices.
The
system of rules, practices and processes by which a company is directed and
controlled. Corporate governance essentially involves balancing the interests
of the many stakeholders in a company - these include its shareholders,
management, customers, suppliers, financiers, government and the community.
Since corporate governance also provides the framework for attaining a
company's objectives, it encompasses practically every sphere of management,
from action plans and internal controls to performance measurement and
corporate disclosure.
WIKIPEDIA explains 'Corporate Governance' :
Corporate
governance the system by which companies are directed and
controlled. It involves regulatory and market mechanisms, and the roles and
relationships between a company’s management, its board, its shareholders and
other stakeholders, and the goals for which the corporation is governed.
Lately, corporate governance has been comprehensively defined as a system of
law and sound approaches by which corporations are directed and controlled
focusing on the internal and external corporate structures with the intention
of monitoring the actions of management and directors and thereby mitigating
agency risks stemming from the devious deeds of these corporate officers.
Corporate
governance consists of the set of processes, customs, policies, laws and
institutions affecting the way people direct administer or control a
corporation. Corporate governance also includes the relationships among the
many players involved (the stakeholders) and the corporate goals. The principal
players include the shareholders, management, and the board of directors. Other
stakeholders include employees, suppliers, customers, banks and other lenders,
regulators, the environment and the community at large.
Read more: http://en.wikipedia.org/wiki/Corporate_governance
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