Corporate Governance

Corporate governance is the system by which companies are directed and controlled- Cadbury Report (UK)

Corporate governance is to do with power and accountability enhancing shareholder value.

Enhancement of long term shareholder value while at the same time protecting the interests of other stakeholders-SEBI

Scope

1.   Right manner of running a corporation.

2.   Achieving  its  objectives

3.   Transparency  in   operations

4.   Accountability

5.   Reporting

6.   Good  corporate  citizenship

7.   Good  operating  relationship

Who Provides Governance?

1.   Board  of  Directors,

2.   Executive  team

3.   Service  providers

4.   Advisory  Board

5.   Venture  capitalists

6.   Major stakeholders.

Managing Challenges

1.   Competition

2.   Economic systems

3.   Globalization

Indices of CG

1.   Improved  performance

2.   Quality

3.   Efficiency

4.   Costs.

5.   Getting the best people.

6.   Training, supporting and guiding the staff.

Current issues in CG

1.   Asymmetry of powers.

2.   Asymmetry  of  information

3.   Interests of shareholders.

4.   Owner management  bias

5.   Failure of the operation of separation of powers.

6.   Division  of  corporate  pie among  shareholders