Business Ethics and Corporate Governance, Second Edition

SUMMARY

The phenomenal growth of modern corporations, have brought about the kind and order of material wealth to the international community that was never possible a few years ago. But this growth was possible, due to the evolution of public limited or joint stock companies, which are most attractive to investors. In such organizations, financial liability of the shareholders is limited to the extent of the shares held by them. However, the investor needs to be protected from insiders as he is not involved in the day-to-day management of the company. To realize such an investor protection, countries have evolved rules, regulations, systems and mechanisms—both internal (to the company) and external.

There is a global consensus about the objective ...