Corporate Governance PDF

BECORE 4 CORPORATE GOVERNANCE TOPICS: Introduction to Corporate Governance Characteristics of Good Governance Definition of Corporation and Corporate Governance Purpose and Objectives of Corporate Governance Benefits of Good Governance  WHAT IS GOVERNANCE? Generally, g...

BECORE 4 CORPORATE GOVERNANCE TOPICS: Introduction to Corporate Governance Characteristics of Good Governance Definition of Corporation and Corporate Governance Purpose and Objectives of Corporate Governance Benefits of Good Governance  WHAT IS GOVERNANCE? Generally, governance refers to a process whereby elements in society wield power, authority and influence and enact policies and decisions concerning public life and social upliftment. Governance means the process of decision-making and the process by which decisions are implemented (or not implemented) through the exercise of power or authority by leaders of the country and/or organizations. Characteristics of Good Governance 1. Participation The participation of citizens in the process of governance is the key characteristic of good governance. Participation is an important step for mobilizing people to participate in the decision-making process. Characteristics of Good Governance 2. Rule of Law Another important characteristic of good governance is the rule of law. It needs a fair legal framework to establish the rule of law in society. Rule of law ensures impartiality which helps to protect human rights, particularly who is most marginal in society. The Independent judiciary system, its impartial nature, and the incorruptible police force are the key element to ensure the rule of law. Characteristics of Good Governance 3. Transparency Governance needs transparency for the fair delivery of services to the citizens. It ensures a balance between policymaking and its enforcement following proper rules and regulations. It enables the citizen to access governmental information regarding various policies and their implementation freely. Proper media should be established for an easy understanding of this information. Characteristics of Good Governance 4. Responsiveness Responsiveness has a basic necessity of the administration which can motivate the interrelationships between administration and people. It requires sufficient services to the people within a specific time. Characteristics of Good Governance 5. Consensus Oriented Governance depends on the consensus of people in society to make it good. It could fulfill the interest of the people as well as the community. It helped to achieve the long-term perspective of human development. And it originated from the social culture and institutional behaviors of the particular society. Characteristics of Good Governance 6. Equity and Inclusiveness An equitable just society must be established for ensuring good governance. Society’s well-being depends on how its members feel about it. It requires all its members to feel that they have a stake in it and they are not excluded from the mainstream in the governance. Characteristics of Good Governance 7. Effectiveness and Efficiency: Effectiveness and efficiency ensure the outcomes of the institutions to meet the needs of society. Proper utilization of society’s resources for the establishment of sustainable development is the key to good governance. It also ensures the sustainable use of natural resources for the protection of the environment. Characteristics of Good Governance 8. Accountability Accountability is one of the most important characteristics of good governance. Good governance depends on how accountable Governmental, as well as private sectors and civil society organizations, are to their people and their institutional stakeholders. Without transparency and the rule of law, accountability cannot be established. What is a CORPORATION? What is Corporate Governance Corporate governance refers to the system of rules, practices, and processes by which corporations are directed and controlled. It essentially involves balancing the interests of a company’s many stakeholders, such as shareholders, management, customers, suppliers, financiers, government, and the community. Helps companies operate more efficiently, mitigate risk and safeguard against mismanagement, and improve access to capital that will fuel their growth. Objectives of Corporate Governance 1. Fair and Equitable Treatment of Shareholders In some organizations, a group of high-net-worth individual and institutions who have a substantial proportion of their portfolios invested in the company, remain active through occupation of top-level positions that enable them to guard their interest. Objectives of Corporate Governance 2. Self-Assessment Corporate governance enables firms to assess their behavior and actions before they are scrutinized by regulatory agencies. Objectives of Corporate Governance 3. Increase Shareholders’ Wealth Another corporate governance’s main objective is to protect the long-term interests of the shareholders. Objectives of Corporate Governance 4. Transparency and Full Disclosure Good corporate governance aims at ensuring a higher degree of transparency in an organization by encouraging full disclosure of transactions in the company accounts. Explain whether the following statement is true or false? “Governance is exercised only by the government of a country.”