Business Ethics and Corporate Governance, Second Edition

RELEVANCE OF CORPORATE GOVERNANCE

Internationally, over the past few years, much emphasis has been placed on the importance of corporate governance. Different economies have systems of corporate governance that differ in the relative strength of influence exercised by the stakeholders and how they influence the management.

Corporate governance is all about governing corporations. By their nature large modern enterprises are usually owned by one group of people (the owners or shareholders) whilst being run by another group of people (the management or the directors). This separation of ownership from management creates an issue of trust. The management has to be trusted to run the company in the interest of the shareholders and other stakeholders. ...