Corporate governance
Summary of article
There has been a shift in corporations from the objective of maximizing profit to the need to ensure
value maximization which can be achieved by proper structure in place. The aspects that encourage high
value attainment include aspects such as transparency, fair treatment of stakeholders, effective policies
and implementation of proper operational standards in any organization.
Failure of some big organizations in the recent past has been due to poor management and governance
of corporate organizations.
The definition of corporate governance according to London’s Stock Exchange Cadburry committee of
1992, is the system by which the companies are directed and controlled (Reema, & Fulbag, 2009).
Principles of corporate governance emphasize on the need of proper exposure of the corporation to the
relevant stakeholders in order to improve transparency. The fundamental principle of equitable
treatment must not be violated. This is to ensure that market participants and investors relationship is
not damaged but made closer with the company (OECD principles of corporate governance, 2004)
The perception of the community towards the company is important; therefore disclosure of the
organizations policies and principle of operation to the public would boost the organizations image and
improve governance. Shareholders should be made aware of any major decisions made as well as
receive fair treatment at all times. Good working relationships between stakeholders is bound to
improve efficiency and governance in the company (OECD principles of corporate governance, 2004).
Discussion
There are a number of pillars that would likely improve governance in any organization. One is to
