Corporate Governance: The Cadbury Report

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Corporate governance has been a topical issue both in the developed and developing countries for the past three decades. Mayer (2013) contends that corporate scandals which have occurred on the international business arena including Africa have prompted governments and regulatory bodies to tighten the screws on corporate governance compliance requirements, especially on the part of public listed companies and state owned enterprises in order to protect the interests of various stakeholders. Klapper and Love (2004) noted that owing to scandals, corporate governance best practices are now on top of the agenda of governments and regulatory bodies and as such, corporate governance statements have become one of the most important disclosure requirements…show more content…
Millstein Report to OECD (2000) further noted that the governance structure specifies the distribution of rights and responsibilities among different participants in the cooperation and specifies the rules and procedures for making decisions in corporate affairs. The participants in the corporation include stakeholders such as the board of directors, managers, shareholders, creditors and regulatory bodies among others. Still on the definition on corporate governance, Selvaggi (2008) defined corporate governance as a system of law and sound approaches by which corporations are directed and controlled focusing on the internal and external corporate structures with the intention of monitoring the actions of managers and the directors and thereby mitigating the agency risk which may stem from the misdeeds of corporate…show more content…
Moreover, from the above mentioned definitions, it can be noted that the main thrust of corporate governance is to enable the top executives to arrive at executive decisions in a systematic manner as opposed to haphazard approach. As such, from the above definitions one is compelled to conclude that corporate governance ensures that the directors and management run the company in a responsible and transparent manner on behalf of the

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