1.1 BACKGROUND TO THE STUDY
The original need for corporate governance stems from the separation of ownership and control in publicly held companies in the 19th century, it is pertinent at this point to note that this separation has brought about overzealous managers and passive owners. Investors seek to invest their capital in profit-making firms so that they can enjoy these profits in the future. Yet many investors lack the time and expertise necessary to operate a firm and ensure that it provides an investment return. As a result, investors hire individuals with management expertise to run the company on a daily basis to see to it that the firm’s activities enhance the company’s profitability and long-term performance.
In order to have the assurance on the money invested, investors look to the published annual reports and accounts of the business and other information releases that the company might make.
The recent spate of corporate debacles have damaged seemingly unassailable corporate reputations and undermined the confidence of investors and the general public in the international financial system. It has been as a result of these corporate failure that corporate governance has take center stage drawing the attention of the international financial services industry to the increasing significance of corporate governance and opened the subject to intensive and extensive discussions and debate at various international financial and economic fora. In 1999 alone there were 274 conferences in 39 countries on the subject. (Mansur, 2007)
These high profile corporate debacles have arisen despite the fact that the annual reports and accounts seemed fine. These corporate debacles have had an adverse effect on many people: Shareholders, Government, Employees and the company itself. Examples of such include; Enron in the United States Of America, World Com in the United States of America, Parmalat in Italy, Barings Bank of the United Kingdom, Cadbury... [continues]
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(2010, 06). Corporate Governance and Financial Reporting in the Nigerian Manufacturing Industry: an Ethical Perspective. StudyMode.com. Retrieved 06, 2010, from http://www.studymode.com/essays/Corporate-Governance-And-Financial-Reporting-In-347181.html
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