Corporate Governance Theories

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CORPORATE GOVERNANCE

The need for corporate governance is not something typical to our country or economy .even in countries where regulatory mechanism are more demanding in their content and more vigilant in its implementation. Flagrant violation under the corporate veil have generated the demand for better governance . The advent of information age has created an awakened shareholders , vigilant public and almost predatory journalistic fervour. Depending upon the model of corporate disclosure followed by different legal framework, right to information has forced corporation to divulge more than they ever did.
Corporate governance is derived from Latin term ‘corpus’ which means ‘body’. governance means administering the process and system placed for satisfying stakeholders expectations . when the two terms are combined it together brings out set of system procedures , policies , practices , standards put in place by a corporate to ensure that relationship with various stakeholders is maintained in transparent and honest manner.
One of the basic feature of corporate governance is that there is a separation of ownership and management. The board of directors work and operate as trustee and agent of shareholders and they have to safeguard the interest of shareholders and other stakeholders
It may also be considered as a network of legal provisions , regulations, practices to bring accountability and transparcy in functioning of the body corporate. It specifies the distributions of rights and responsibilities among different participants in the corporation, such as among the board , managers , shareholders and other stakeholders.
They have to do the following: * To act in the best interest of the company * To give directions * To remain accountable to the shareholders

DEFINATION OF CORPORATE GOVERNANCE * “Corporate governance is concerned with…...

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