Corporate Governance Case Study

806 Words4 Pages

Governance has proved an issue since people began to organize for a common purpose. Ensuring the power of organization is harnessed for the agreed purpose, rather than diverted to some other purpose appears to be a constant theme. Corporate governance investigates how to motivate and ensure an efficient management of the enterprises and involves: a set of formal and informal rules that establish certain relationships between the executive management of the company, the board of directors and the shareholders of the company, as well as other people of interest groups that have ties to the company; mechanisms through which the objectives of the company are set and are established the means of achieving those objectives and of monitoring the performance; …show more content…

The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society. (Sir Adrian Cadbury, 2002)
Cycles of crisis and reform in corporate governance are becoming a worldwide phenomenon. Contemporary concerns, originating in market and corporate failures in the United States and United Kingdom, have extended to Europe, the Pacific Asia, and beyond. The vital significance of corporate governance for accountability and performance is now fully recognized in the industrial world, and perhaps even more acutely in the transitional economies in Eastern Europe, East Asia and Latin …show more content…

The principles highlight many pressing and unresolved problems of corporate governance, and offer much helpful policy guidance. However, an inherent weakness in the approach of the OECD is to attempt simultaneously, in the same policy document, to deal with the critical issues arising out of the post-Enron repercussions in the Anglo-American region and to address the rather different set of fundamental governance issues facing the developing world. The OECD corporate governance principles have had considerable influence on the advance of policy and practice in corporate governance in both developed and the developing world; however the impact may have been more beneficial if the different stages of economic and regulatory development across countries and regions might have been more explicitly

Open Document