CORPORATE GOVERNANCE

Corporate Governance



Table of Contents

Introduction3

Discussion3

Strengths and Weaknesses of the Paradigm4

Theoretical Learning from Major Cases of Governance Failure6

The Cases of WorldCom and Xerox7

Conclusion9

References10

Corporate Governance

Introduction

Corporate governance involves a set of relations between the company management, its board, its shareholders and other stakeholders. It also provides the structure that establishes the goals of the company, and the means to achieve and monitor performance. It includes the means by which the directors and senior management are held accountable for their actions for the establishment and implementation of functions and monitoring process (Carlsson, 2001, pp. 216). Banks are leaders in recognizing the importance of maintaining public confidence in financial markets and show a strong track record of good corporate governance.

The rules and regulations of corporate governance and ethics are based on achieving transparency and justice, the granting of accountability of the management company, and thus, achieving the protection of shareholders and policyholders of all. This must also take into account, the interests of employers and workers, reduce the abuse of power is the public interest, leading to the development of investment and encourage the flow, the development of savings, maximize profitability, and create new job opportunities (Brennan & Solomon, 2008, pp. 885-906).

Discussion

British Common Law is based on the decisions taken by courts to defraud cases. It also undergoes further changes based on the new solutions. Consequently, the direct influence of the first two defining events - the liability of directors and the adoption of the corporation as a research artificially beings with their own life, and continues by case law. In the past, two centuries has been created a dynamic set of right labor standards of corporate governance, which is in constant motion. However, the basic principles of corporate of management remained the same. Through an efficient, corporate governance system, companies seek to obtain the following:

1.A better distribution of powers between different structures of the company such as the board, and CEO,

2.Clarifying the functions of the board of directors (for example indicating independent directors),

3.The creation of oversight committees with expertise in areas where there are potential conflicts of interest (Solomon, 2010, pp. 18-425).

The emergence of corporate governance is given because of the responsibility with the boards and audit committees to provide security on the reliability of financial reporting, as it has been shown that the higher the quality of corporate governance greater reliability financial reporting. The more supervised and more independent members the company on board, the lesser the fraud is committed (Wearing, 2005, pp. 105-109).

Strengths and Weaknesses of the Paradigm

The Austrailian Stock Exchange (ASX) Rules constitute a board that is collectively responsible for promoting the success of the company by:

(A) Overseeing the company control systems and responsibility to allow risk to be determined and be handled;

(B) Ensuring that the company is handled properly, for example: appointing and, where appropriate, removing the CEO, (ii) ratify the appointment and, where appropriate, the official retirement of chief financial and company secretary, (iii) entered into and final approval management ...