Business Ethics and Corporate Governance, Second Edition

ETHICAL GOVERNANCE NEEDED TO PROTECT STAKEHOLDERS

Corporate governance is needed to create a corporate culture of consciousness, transparency and openness. It refers to a combination of laws, rules, regulations, procedures and voluntary practices to enable companies to maximize shareholders’ long-term value. It should lead to increasing customer satisfaction, shareholder value and wealth. Corporate governance deals with a company’s ability to take managerial decisions vis-à-vis its claimants in particular, its shareholders apart from other stockholders.