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The system by which companies are directed and controlled. Corporate governance is the direction and control of an organisation for the benefit of its stakeholders. Corporate governance codes work only where firms believe working in a legal, ethical and transparent fashion also means good business.
So good corporate governance is all about ensuring that the needs and interests of all of an organization's stakeholders are taken into account in a balanced and transparent manner.
Its not just a matter of having the right policies and procedures in place. It is also no guarantee of success.
Good corporate governance enhances : Transparency everything happening in the company is known by the stake holders Accountability management is accountable for its decision.
Equanimity rights of all the stake holders are equal, regardless of the major and minor shareholding,
Justice Owen expressed the view: Good governance processes are likely in my view to create an environment that is conducive to success. It does not follow that those who have good governance processes will perform well or be immune from failure. Risk exists to some extent at the heart of any business. Risks are taken in the search for rewards. No system of corporate governance can prevent mistakes or shield companies and their stakeholders from the consequences of error. Corporate failures will occur.