CORPORATE GOVERNANCE Essay Example | Topics and Well Written Essays - 2500 words

CORPORATE GOVERNANCE - Essay Example aller subtitles such as ‘corporate governance’ and ‘implementation of corporate governance principles and recommendations in the UK and the US’ in order to cover the topic exhaustively. The conclusion section summarizes the main issues discussed in the paper and makes inferences where appropriate. Corporate governance refers to a set of laws, policies, institutions and customs that affect the manner in which a corporation is controlled, administered, or directed1. Corporate governance also incorporates the corporation’s goals of governance and the relationships among its numerous stakeholders2. The major stakeholders in any corporation include the board of directors, management, and shareholders or members. Others include regulators, suppliers, creditors who include bond holders and banks, customers and employees or labour. For non-profit organizations as well as other membership organizations, their shareholders are their members. Corporate governance is a many-sided subject3. One of the most important themes of corporate governance is ensuring the accountability of particular individuals in the corporation. This is achieved through mechanisms aimed at reducing or eliminating altogether the problem of principal-agents. Corporate governance also helps in improving economic efficiency by emphasizing on the welfare of the shareholders. Corporate governance also has encompasses other subjects such as the view of stakeholders and corporate governance models4. Modern corporations have increasingly renewed their interest in corporate governance practices, particularly since 2001. This has been attributed to the high profile crumbling of numerous big corporations in the United States, including MCI Inc and Enron Corporation. For instance, the US federal government enacted the Sarbanes-Oxley Act in order to restore the confidence of the public in corporate governance5. Corporate governance involves a number of parties such as the regulatory body that