Business Ethics and Corporate Governance, Second Edition

WHY CORPORATE GOVERNANCE?

As has been pointed out earlier, the joint-stock, limited liability company has become the preferred organization for running business throughout the world. It has proved its worth in providing employment, generating wealth, and contributing to economic and social development. The original concept of the company, which stems from the mid-nineteenth century, has proved immensely innovative, elegantly simple and highly successful.

In the limited liability company, the business is incorporated as an independent legal entity, separate from its owners, whose liability for its debts is limited to the amount of equity capital they have agreed to subscribe to. In law, the company has many of the rights of a legal person—to buy ...