Corporate Governance

Corporate governance is "the system by which companies are directed and controlled". It involves regulatory and market mechanisms, and the roles and relationships between a company’s management, its board, its shareholders and other stakeholders, and the goals for which the corporation is governed. In contemporary business corporations, the main external stakeholder groups are shareholders, debtholders, trade creditors, suppliers, customers and communities affected by the corporation's activities. Internal stakeholders are the board of directors, executives, and other employees.

Much of the contemporary interest in corporate governance is concerned with mitigation of the conflicts of interests between stakeholders. Ways of mitigating or preventing these conflicts of interests include the processes, customs, policies, laws, and institutions which have impact on the way a company is controlled. An important theme of corporate governance is the nature and extent of accountability of people in the business.

A related but separate thread of discussions focuses on the impact of a corporate governance system on economic efficiency, with a strong emphasis on shareholders' welfare. In large firms where there is a separation of ownership and management and no controlling shareholder, the principal–agent issue arises between upper-management (the "agent") which may have very different interests, and by definition considerably more information, than shareholders (the "principals"). The danger arises that rather than overseeing management on behalf of shareholders, the board of directors may become insulated from shareholders and beholden to management. This aspect is particularly present in contemporary public debates and developments in regulatory policy.(see regulation and policy regulation).

There has been renewed interest in the corporate governance practices of modern corporations, particularly in relation to accountability, since the high-profile collapses of a number of large corporations during 2001-2002, most of which involved accounting fraud. Corporate scandals of various forms have maintained public and political interest in the regulation of corporate governance. In the U.S., these include Enron Corporation and MCI Inc. (formerly WorldCom). Their demise is associated with the U.S. federal government passing the Sarbanes-Oxley Act in 2002, intending to restore public confidence in corporate governance. Comparable failures in Australia (HIH, One.Tel) are associated with the eventual passage of the CLERP 9 reforms. Similar corporate failures in other countries stimulated increased regulatory interest (e.g., Parmalat in Italy).

Read more about Corporate Governance:  Principles of Corporate Governance, Corporate Governance Models Around The World, Regulation, Parties To Corporate Governance, Mechanisms and Controls, Systemic Problems of Corporate Governance, Executive Remuneration/compensation

Other articles related to "corporate governance, corporate, governance, corporates":

Corporate Governance - Executive Remuneration/compensation
... long running argument concerned the interaction of executive options with corporate stock repurchase programs ... These authors argued that, in part, corporate stock buybacks for U.S ... A combination of accounting changes and governance issues led options to become a less popular means of remuneration as 2006 progressed, and various alternative implementations of ...
Mervyn King (judge) - Biography - International Arena
... He was the first president of the Commonwealth Association of Corporate Governance and a former Governor of the International Corporate Governance Network ... Sector Advisory Group to the World Bank on Corporate Governance and a member of the international advisory boards of Stern Stewart (U.S.), Tomorrow's ... He chairs the Asian Centre of Corporate Governance, the United Nations Committee on Governance and Oversight, and the Global Reporting Initiative ...
Cal STRS - Investments and Corporate Governance
... The board has supported a variety of corporate governance initiatives and actions aimed at keeping the fund stable ... Support of the Sarbanes-Oxley Act of 2002 that brings dramatic new standards to the corporate board rooms and accounting profession ... in lax business practices Discussions with individual corporate leaders to express CalSTRS interest in good corporate governance practices ...
Institute Of Company Secretaries Of India - Role of Company Secretaries
... and the functional departments of the company on various corporates, business, economic and tax laws  is an important member of the corporate management team and acts as conscience seeker of the company ... Corporate Governance Services Advising on good governance practices and compliance of Corporate Governance norms as prescribed under various Corporate, Securities ... Company Secretary also assists in developing a corporate compliance management system and social sustainability framework ...
Colin Mayer
... Fellow and Board Member of the European Corporate Governance Institute (ECGI) in Brussels and a Research Fellow of the Centre for Economic Policy Research (CEPR) in London ... He researches in the fields of corporate finance, governance, regulation and taxation and has worked on international comparisons of financial systems ... in Economics at St Anne’s College Oxford (1980-1986), Professor of Corporate Finance at City University (now Cass) Business School (1987-1992), and Professor of Economics and Finance at Warwick University (1992-1994) ...

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