Corporate

Governance
Presented By

Rahul.R(18MBAA37)
Rangeela.A(18MBAA38)
Renuka.B(18MBAA39)
Sajeen Sabana. S(18MBAA40)
Sankara Narayani.S(18MBAA41)
Santheya A.M(18MBAA42)
Corporate
governance Introduction-History 1
Scope and benefits
2
Issues and principles 3

Conclusion 4
 Corporate Governance is a
system concerned with how
company is controlled and directed
Introduction
Introduction
by its owners and managers.

It is broadly referred to as set of

relationship company’s
management, i.e., its board, its
shareholders and stakeholders.

It is an instrument to obtain business

collectively and transparency and also to
promote economic growth.
 According to La Porta et al., CG refers to “a set
Definition
Definition of mechanisms through which outside
investors protect themselves against
expropriation by the insiders.”

According to Gregory, “demand for

investment capital is increasing
throughout both developed and
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developing countries.”
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History
1932—U.S. Securities & Exchange Commission (SEC) is formed,
requiring corporations to allow shareholder resolutions to be
brought to a vote of all shareholders.

Mid-1900s—The goal of business is to align the interests of principals

and agents so that organizational value and viability are maintained.
History
Mid -1990s –Board of directors play a greater role in strategy
formulation and
There is movement toward corporate governance committees.

2002-Sarbanes –Oxley act brought sweeping changes in corporate

governance

2008-2009-Collapse of U.S financial system disclose corruption and

need for greater oversight and control
Scope
If the corporate governance of the company is proper it
Scope will ultimately lead to better economic growth and more
success rate.

Better corporate governance helps in getting the

confidence of the investor which will ultimately help the
company in raising and acquiring the capital fast and
effectively.
It also helps in increasing the share price of the company.

It plays in building up the goodwill of the corporation.

Proper corporate governance help in attaining the efficiency and also

minimizes mismanagement ,risk , and corruption.
Benefits Good corporate governance ensures corporate success
and economic growth.

It lowers the capital cost.

There is a positive impact on the share price.

It helps in brand formation and development.

It provides proper inducement to the owners as well as

managers to achieve objectives that are in interests of
the shareholders and the organization.

It ensures organization in managed in a manner that fits

the best interests of all.
Issues
CONFLICTS OF INTEREST
A conflict of interest within the framework of corporate
governance occurs when an officer or other controlling
member of a corporation has other financial interests that
directly conflict with the objectives of the corporation.
OVERSIGHT ISSUES
Oversight is a broad term that encompasses the executive
staff reporting to the board and the board’s awareness of the
daily operations of the company and the way in which its
objectives are being achieved.
ACCOUNTABILITY ISSUES
Accountability is necessary for effective corporate governance. From
the top-level executives to lower-tier employees, each level and division
of the corporation should report and be accountable to another as a
system of checks and balances.

TRANSPARENCY
To be transparent, a corporation must accurately report their profits
and losses and make those figures available to those who invest in their
company.

ETHICS VIOLATIONS
Members of the executive board have an ethical duty to make
decisions based on the best interests of the stockholders.
Principles Fairness
Fairness refers to equal treatment, for
example, all shareholders should receive
equal consideration for whatever
shareholdings they hold.

Accountability

Corporate accountability refers to the obligation

and responsibility to give an explanation or
reason for the company’s actions and conduct.
Significance
Responsibility
Board of Directors are given authority to act on
behalf of the company. They should therefore accept
full responsibility for the powers that it is given and
the authority that it exercises
Transparency
A principle of good governance is that stakeholders
should be informed about the company’s activities,
what it plans to do in the future and any risks
involved in its business strategies.
 Corporate governance is considered as an important means f
Significance paying heed to investors’ grievances.

Global Perspective - The extent to which corporate enterprise

observe the basic principles of good corporate governance ha
now become an important factor for attracting foreign
investment.

Clearly defined roles of the board – Each member of the

board of governors has a specific role to fulfill.

Ethical behavior- Everyone who is part of the company must

demonstrate ethical behavior and follow a clear code of
conduct when carrying out their activities
Conclusion

The effective implementation of good governance practices

would ensure investors confidence in the corporate
companies which will lead to greater investment in them
ensuring their sustained growth

Thus good corporate governance would greatly benefit the

companies enabling them to thrive and prosper.
Thank you