Problems In Corporate Governance
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View Problems In Corporate Governance as PDF for free.
More details
- Words: 227
- Pages: 6
PROBLEMS IN CORPORATE GOVERNANCE
Definition of Corporate Governance Corporate governance is a term that refers broadly to the rules, processes, or laws by which businesses are operated, regulated, and controlled. The term can refer to internal factors defined by the officers, stockholders or constitution of a corporation, as well as to external forces such as consumer groups, clients, and government regulations.
IMPORTANCE OF CORPORATE GOVERNANCE
Access to external financing by firms
Lowers of the cost of capital by creating higher firm valuation
Remove mistrust between different stakeholders
Interest to investors
Ensures that the business environment is fair and transparent
Linked to economic development
Significantly reduce the risk of nation-wide financial crises
PROBLEMS OF CORPORATE GOVERANCE
Legal and administrative environment
Challenges of transparency
Dark side of Accounting for Financial information
Stringent norms of Corporate Governance
Faulty Corporate Governance structure
Commitment of management
Conflict of values
Corporate Law v/s Corporate Governance
ENRON SCANDAL
Enron was a Houston-based natural gas pipeline company Formed in 1985.
Filed for bankruptcy- December 2, 2001.
Used partnerships to hide bad debts.
Accounting schemes to reduce taxes.
Insider Trading .
CORPORATE GOVERNANCE SOLUTIONS • Redefine the role of the board • Redefine the role of auditors • Minority Shareholders • Revamp laws, rules and regulations
Definition of Corporate Governance Corporate governance is a term that refers broadly to the rules, processes, or laws by which businesses are operated, regulated, and controlled. The term can refer to internal factors defined by the officers, stockholders or constitution of a corporation, as well as to external forces such as consumer groups, clients, and government regulations.
IMPORTANCE OF CORPORATE GOVERNANCE
Access to external financing by firms
Lowers of the cost of capital by creating higher firm valuation
Remove mistrust between different stakeholders
Interest to investors
Ensures that the business environment is fair and transparent
Linked to economic development
Significantly reduce the risk of nation-wide financial crises
PROBLEMS OF CORPORATE GOVERANCE
Legal and administrative environment
Challenges of transparency
Dark side of Accounting for Financial information
Stringent norms of Corporate Governance
Faulty Corporate Governance structure
Commitment of management
Conflict of values
Corporate Law v/s Corporate Governance
ENRON SCANDAL
Enron was a Houston-based natural gas pipeline company Formed in 1985.
Filed for bankruptcy- December 2, 2001.
Used partnerships to hide bad debts.
Accounting schemes to reduce taxes.
Insider Trading .
CORPORATE GOVERNANCE SOLUTIONS • Redefine the role of the board • Redefine the role of auditors • Minority Shareholders • Revamp laws, rules and regulations
Related Documents
Problems In Corporate Governance
June 2020 6
Corporate Governance In Banks
December 2019 20
Corporate Governance In Insurance
April 2020 8
Corporate Governance In Cooperatives
May 2020 11
Corporate Governance In Malaysia
May 2020 8