Corporate Governance Bank of China
Overview of Corporate Governance
Corporate Governance is more than just corporate management. In broader sense, it includes a fair, efficient and transparent administration to meet certain well defined objectives. It is a system of structuring, operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers and complying with the legal and regulatory requirements, apart from meeting environmental and local community needs.
When it is practiced under a well-laid out system, it leads to the building of a legal, commercial and institutional framework and demarcates the boundaries within these functions are performed.
Cadbury’s (2002) definition- “Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship to those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society.
The investors should be concerned and aware of their companies’ corporate governance policies because it will
a) Monitor the concerned company is on the right path in relation to the set objectives by articulating their investment objectives to the management.
b) A strong good corporate governance policies being adhered can prove highly valuable and ultimately lead to a higher valuation of the company.
c) Most importantly, the shareholders would understand their basic rights and overall functioning of the company by the management.
d) To know whether the board and the management in practicing good corporate governance.
Reference for the Rules of Bank of China’s Corporate Governance- www.boc.cn/en/investor www.oecd.com www.bis.org/publ/bcbs176.pdf Books- 1) The Board of Directors 25 Keys to Corporate
Corporate Governance is more than just corporate management. In broader sense, it includes a fair, efficient and transparent administration to meet certain well defined objectives. It is a system of structuring, operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers and complying with the legal and regulatory requirements, apart from meeting environmental and local community needs.
When it is practiced under a well-laid out system, it leads to the building of a legal, commercial and institutional framework and demarcates the boundaries within these functions are performed.
Cadbury’s (2002) definition- “Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship to those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society.
The investors should be concerned and aware of their companies’ corporate governance policies because it will
a) Monitor the concerned company is on the right path in relation to the set objectives by articulating their investment objectives to the management.
b) A strong good corporate governance policies being adhered can prove highly valuable and ultimately lead to a higher valuation of the company.
c) Most importantly, the shareholders would understand their basic rights and overall functioning of the company by the management.
d) To know whether the board and the management in practicing good corporate governance.
Reference for the Rules of Bank of China’s Corporate Governance- www.boc.cn/en/investor www.oecd.com www.bis.org/publ/bcbs176.pdf Books- 1) The Board of Directors 25 Keys to Corporate