CORPORATE GOVERNANCE

Corporate Governance

Meaning of corporate

A corporation is an organization created by a group of shareholders who have ownership of the corporation .

Meaning of governance

Governance meaning define as the act ,manner, fact or function of governing and way control

What is Corporate Governance ?

Corporate Governance refers to the structures & processes

for the efficient & proper direction & control of companies

(both private and public) in the interest of all stakeholders.

CORPORATE GOVERNANCE

What is Corporate Governance ?

- Is a concept; one size does not fit all, HOWEVER: - Basic Principles of Corporate Governance:
Accountability Rights

of Shareholders of Stakeholders Diligence Disclosure Commitment

Transparency Interests Fairness Integrity

Good Faith Trust

Responsibility Controls

CORPORATE GOVERNANCE

Corporate Governance Framework

Governance Principles Legal / Regulatory Codes of Best Practice Stakeholder Relations Self Regulation Ethical Standards Risk Management

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Why Corporate Governance Matters

Enhances performance of companies Enhances access to capital Enhances long term prosperity. Provides a barrier to corrupt dealings- limiting discretionary decision making, increasing oversight, introducing Codes of Ethics etc

Impacts on the society as a whole: Better companies, Better societies.

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Good Corporate Governance and Good Public Governance are complementary

The proper governance of companies will become as crucial

to the world economy as the proper governing of countries.

James Wolfensohn President of WB, 1999

CORPORATE GOVERNANCE

Corporate GovernanceChannel of Growth & Development

Country level

Sector level

Individual firms

CORPORATE GOVERNANCE

Corporate GovernanceChannel of Growth & Development

Increases access to external financing leading to larger

investment, high growth & creation of more jobs

Better allocation of resources Better management creating wealth Reduces the risk of financial crisis Better relationship with all stakeholders

CORPORATE GOVERNANCE

Corporate GovernancePrinciples for the Public Sector

Generally derived from the private sector

Ensures public accountability

Promotes responsive and accountable institutions Good financial management of resources Good stewardship
Responsibility to protect the wealth of the state and its citizens Maintain and safeguard it in the interest of the citizens

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Good Corporate Governance, Good Government & Good Business go hand in hand
Good Governance by Host Country

Good Governance by Private Sector

Good Governance by Investment Promotion Agencies

Good Governance by Investors

CORPORATE GOVERNANCE

Good Governance by Host Country

Transparent, stable and predictable investment climate:

Appropriate legislation to support investment

Anti corruption measures

Effective , speedy and transparent resolution of disputes

Forum for Investors

Capacity Building

CORPORATE GOVERNANCE

Good Governance by Private Sector

Institutional Framework

Role of Board of Directors

Management

Risk factors
Transparency & Disclosure

Reputation

CORPORATE GOVERNANCE

Good Governance by Investment Promotion Agencies

Self Regulation

Transparency & Disclosure

Accountability

Commitment
Sound and Clear Administrative Policies

Stakeholder engagement

CORPORATE GOVERNANCE

Good Governance by Foreign Investor

Good faith

Business Integrity
Governance Policies

Human Capital
Corruption Practices

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Recommendations
Continued advocacy on the benefits of Corporate Governance

Codes of Corporate Governance for countries

Capacity building

Sourcing of funds to support Corporate Governance

development.

Every institution , every stakeholder should provide input into

the corporate governance agenda

CORPORATE GOVERNANCE

Conclusion
If a country does not have a reputation for strong corporate governance practice, capital will flow elsewhere. If investors are not confident with the level of disclosure, capital will flow elsewhere. If a country opts for tax accounting and reporting standards, capital will flow elsewhere. All enterprises in that country-

regardless of how steadfast a particular companys practices may be- suffer the
consequences. Markets exist by the grace of investors. And it is todays more empowered investors that will determine which companies and markets will

stand the test of time and endure the weight of greater competition. It serves us
well to remember that no market has a divine right to investors capital