2. Definition of corporate governance
Definition of corporate governance from business dictionary
"The framework of rules and practices by whit a board of directors ensures accountability, fairness, and transparency in a company's relationship with its all stake holders (financiers, customers, management, employees, government and the community)"
Contrary of being a law, corporate governance is a set of rules within its company walls. It is set to help the company achieve its objectives and at the same time maintain the interest of the internal and external users of the company. It is a set of regulations needed by each company to function promptly.
There are three main objectives for corporate governance:
1. To build up an element of trust and confidence
2. Enhance a stakeholders' value
3. Enhance corporate performance and accountability
In any business, trust is an important element. Without it a company fails. First, there has to be trust between the company shareholders to run a business together. Then, it comes down to management level : trust between coworkers, trust between the upper management and lower management. Finally the trust between the company and stakeholders. The later is very important as this helps the company itself to function and achieve its objectives.
One can enhance a stakeholders' value by establishing a long term stability. The company has constantly keep their stakeholders' updated on the current activities of the company. This will also help to create a bigger circle of trust. In a recent article by Mahendra Gupta (SAVIOM), he has mentioned that a company should adopt to resource management software to increase the stakeholders' value. Below is the link
http://www.saviom.com/article-21.htm
In the world of business performance and accountability of a company is regarded in a high level. A company should strive to improve its performance so that stakeholders' of the company can continue relying on it. When the company is performing well, it will be accounted on its own to the community.
References and other reading material
(Shleifer & Vishny, 2012)
http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.1997.tb04820.x/full
(business dictionary website)
(cgmalaysia)
There are three main objectives for corporate governance:
1. To build up an element of trust and confidence
2. Enhance a stakeholders' value
3. Enhance corporate performance and accountability
In any business, trust is an important element. Without it a company fails. First, there has to be trust between the company shareholders to run a business together. Then, it comes down to management level : trust between coworkers, trust between the upper management and lower management. Finally the trust between the company and stakeholders. The later is very important as this helps the company itself to function and achieve its objectives.
One can enhance a stakeholders' value by establishing a long term stability. The company has constantly keep their stakeholders' updated on the current activities of the company. This will also help to create a bigger circle of trust. In a recent article by Mahendra Gupta (SAVIOM), he has mentioned that a company should adopt to resource management software to increase the stakeholders' value. Below is the link
http://www.saviom.com/article-21.htm
In the world of business performance and accountability of a company is regarded in a high level. A company should strive to improve its performance so that stakeholders' of the company can continue relying on it. When the company is performing well, it will be accounted on its own to the community.
References and other reading material
http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6261.1997.tb04820.x/full
http://cgmalaysia.blogspot.com/
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