CORPORATE GOVERNANCE
Corporate Governance
By Joe Nyutu
In January 2019 , I spent two fruitful days with the board of a local beer processing firm at Leisure Lodge- Diani , training them on corporate governance . One of the throbbing matters that came out was the directors ’ conflict of interest on insider trading . This provocative conversation made me think of sharing a piece on corporate governance .
Corporate governance entails accountability , transparency and credibility , as well as being able to put in place effective channels that can disclose information in a manner that fosters good corporate performance . All firms especially the commercial ones , not for profit making firms and corporate bodies are all concerned about good corporate governance and its importance .
Corporate governance is crucial to all firms or institutions regardless of industry , firm ’ s growth level or even the firm ’ s size . Corporate governance ensures that the interest of all stakeholders in a firm is catered for , be it the investors or the firm ’ s clients . It also ensures that the investor ’ s main interest which is profit maximization is taken care of .
Stable mechanism of corporate governance is vital as it focus on enhancing the firm ’ s worthiness while ensuring the same is not tempered with . Theoretically , the agency theory suggests that corporate governance is mainly meant to protect the shareholders interest in a firm . That is to ensure that managers work towards maximization of the owner ’ s wealth . It also safeguards against misuse of firm ’ s resources for selfish interests of managers and firm ’ s employees in general .
The resource dependency theory supports that business performance can be evaluated by the effectiveness of the network and communication between parties privy to the contract of firms ( Afza & Nazir , 2016 ). The stakeholder theory supports that the
Corporate governance is a term often used to describe the way a company is managed , monitored , and held accountable . There is no universally accepted definition of corporate governance primarily because its concept is not well defined , it covers various distinct economic phenomena , and it is often described from shareholders ’ view of what a company should and should not do . corporate governance should be able to recognize the importance and the rights and the needs of the firm ’ s stakeholders and ensure that a cooperation of both the stakeholders within a firm is forged a head to work towards wealth creation for a sound enterprise . The stewardship theory supports that better performance serves as a source of motivation for firm ’ s managers who work as firm ’ s stewards and consider the organizational objective and goals as their own .
Corporate governance is a term often used to describe the way a company is managed , monitored , and held accountable . There is no universally accepted definition of corporate governance primarily because its concept is not well defined , it covers various distinct economic phenomena , and it is often described from shareholders ’ view of what a company should and should not do .
Corporate governance refers to a situation where the firm ’ s management is encouraged to adopt the stakeholders ’ goals and objective , which is usually wealth maximization . It also refers to a process where the firm ’ s management are directed , controlled and held responsible for their action or decisions within the firm . Corporate governance involves a corporation of accountability , authority and direction .
Governance is concerned with structures and processes for decision making , accountability , control and behavior at the top of organizations . It is considered the means by which an organization is directed and controlled . Corporate governance refers to the processes
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