Corporate Governance Importance
2.1 Introduction Corporate governance is important element to direct and managed the companies or institutions . It is refers to the way the company or institution be governed. One of the objectives of corporate governance that wants to be achieved is to balancing the interests of many stakeholders within the institutions or company such as the shareholders, management, customers, suppliers, financiers, government and the community. The implementation of corporate governance is involving the various interactions of participants between shareholders, board of directors, and institution’s management. The interactions are important in order to ensure the objective of corporate governance can be achieve which can provide benefits to all the participants. …show more content…
Thus, the organizations become more successful because the stakeholders are discipline with their own roles and position in organization. One of the principles of corporate governance is ethics and integrity which the board should have a higher standard of professionalism and follow a code of conduct during decision making process. Corporate governance also fully involves on how corporations ought to fulfill their responsibilities to their shareholders and other stakeholder. There is a guideline to organization to sustain and enhance value. Good corporate governance should focus on the implementing the values of fairness, transparency, accountability and responsibilities toward both shareholders and stakeholder in order to keep good performance for organizations. Weak corporate governance towards organization will lead to the waste, mismanagement between employers and corruption which causes the downfall of the …show more content…
It does require a good communications and relationship between many stakeholders within the institutions or company such as the shareholders, management, customers, suppliers, investors, financiers, government and the community. The confidence of investors in the companies is increases because of good corporate governance and it gives impact positive on overall business environment. The main elements that want to be emphasized within the establishment of corporate governance in company are transparency, trustworthy, moral and ethical environment. These good values are important within the organization of the companies in managing the business operation. Besides, good corporate governance helps to prevent fraud, corporate scandals and misappropriation of money in organizations. This problem will lead to the bad reputation of the organization and it responsibility to implement the corporate
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