corporate governance
Definition of Corporate Governance
“The process and structure used to direct and manage the affairs of the business towards enhancing business prosperity and corporate accountability with the ultimate objective of realizing long-term shareholder value, whilst taking into account the interests of other stakeholders”.
Prior to the establishment of this definition, there were 4 others namely by;
The Cadbury Report (1992) defined corporate governance as „a whole system of controls by which a company is directed and controlled‰. Accordingly, the focus of corporate governance is on the roles of the board of directors and the roles of shareholders as owners of the company in providing appropriate governance of the company. The board of directors is considered one of the corporate governance mechanisms. Other governance mechanisms include markets for control, auditors, law and regulations.
The Organization for Economic Co-operation and Development (OECD, 1999) has a broader definition of principals which includes other stakeholders. It is defined as „...a set of relationships between a company’s board, its shareholders and other stakeholders. It also provides the structures through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.
Sheilfer and Vishny (1997) focused on the scope of corporate governance to specific stakeholders who are the suppliers of finance. Corporate governance is defined as
„...the ways in which suppliers of finance assure themselves of getting a return on their investment. The Higgs Report (2003) relates corporate governance to corporate accountability which considers both board structures and processes to manage shareholders interests.
In Western countries, companies are characterized as having diffused ownership where shares are held by many shareholders in small quantities. However, in emerging Asian countries,
“The process and structure used to direct and manage the affairs of the business towards enhancing business prosperity and corporate accountability with the ultimate objective of realizing long-term shareholder value, whilst taking into account the interests of other stakeholders”.
Prior to the establishment of this definition, there were 4 others namely by;
The Cadbury Report (1992) defined corporate governance as „a whole system of controls by which a company is directed and controlled‰. Accordingly, the focus of corporate governance is on the roles of the board of directors and the roles of shareholders as owners of the company in providing appropriate governance of the company. The board of directors is considered one of the corporate governance mechanisms. Other governance mechanisms include markets for control, auditors, law and regulations.
The Organization for Economic Co-operation and Development (OECD, 1999) has a broader definition of principals which includes other stakeholders. It is defined as „...a set of relationships between a company’s board, its shareholders and other stakeholders. It also provides the structures through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.
Sheilfer and Vishny (1997) focused on the scope of corporate governance to specific stakeholders who are the suppliers of finance. Corporate governance is defined as
„...the ways in which suppliers of finance assure themselves of getting a return on their investment. The Higgs Report (2003) relates corporate governance to corporate accountability which considers both board structures and processes to manage shareholders interests.
In Western countries, companies are characterized as having diffused ownership where shares are held by many shareholders in small quantities. However, in emerging Asian countries,