BY: DR. RONALD IWU-EGWUONWU
Nations thrive on the performance of their economic units the major part of which are business firms that operate in their corporate jurisdictions. The quality of performance of these firms is of great interest to governments because by them a great amount of the degree of economic development seen in a country is achieved. Governments fund their annual budgets to a great extend by the amount of proceeds that come from internally generated revenues a good part of which come from firms and corporations in the form of tax and other forms of direct and indirect support. These firms also support quite a lot of developmental projects in the country in line with their social responsibility goals. They are able to do these things when they do well themselves. But to do well firms must by themselves be governed well. The notional view therefore is that the quality of performance of firms very much depends on the quality of their corporate governance. It is believed that without good governance no firm can do well and when firms don’t do well their contribution to the economic development of the nation would be zero.
Notwithstanding that good governance has been a long time issue in public and corporate governance, today there is a very strong interest in corporate governance, and this interest is driven by the frequency of high profile corporate scandals beginning with those of Enron, WorldCom, Royal Trust, Parmallat, and so on. In Nigeria’s banking industry alone, about 54 banks failed between 1994 and 2005. This figure is quite scandalous and disturbing and has thus helped to heighten over all interest in the improvement of the quality of corporate governance. The role of the board as their firms collapse or get into scandals “overnight” has also been quite disturbing. Just like it takes many years to become rich overnight, it also takes quite a long time of... [continues]
Cite This Essay
(2009, 10). Does Corporate Governance Enhance Firm Performance?. StudyMode.com. Retrieved 10, 2009, from http://www.studymode.com/essays/Does-Corporate-Governance-Enhance-Firm-Performance-238155.html
"Does Corporate Governance Enhance Firm Performance?" StudyMode.com. 10 2009. 10 2009 <http://www.studymode.com/essays/Does-Corporate-Governance-Enhance-Firm-Performance-238155.html>.
"Does Corporate Governance Enhance Firm Performance?." StudyMode.com. 10, 2009. Accessed 10, 2009. http://www.studymode.com/essays/Does-Corporate-Governance-Enhance-Firm-Performance-238155.html.