CORPORATE GOVERNANCE

The Affect of Corporate Governance on Investment Decisions

Abstract

This research proposal highlights the effects of corporate governance on investment decision. In order to understand the effects on investment decision through shareholders approach, it is necessary to build the understanding and implications of corporate governance of an organization. This Proposal is based on three chapter including Introduction, Literature reviews and Research Methodology.

Table of Contents

Chapter 01: Introduction1

Background of Study:1

Research Aims:2

Study Questions:3

Theoretical Approach to Corporate Governance:3

Chapter 02: Literature Review5

The Importance of Corporate Governance:5

Standards of Corporate Governance:6

Chapter 03: Methodology8

Research Type8

Research Process9

Limitations of Qualitative Data:9

Research Strategy9

Interviews:10

Focus Groups:10

Literature search:10

Validity and Reliability of Data11

References12

The Affect of Corporate Governance on Investment Decisions

Outline of the Research Proposal

This research proposal concentrates on the several facets of corporate governance and incorporates the following chapters:

Introduction to the Topic

Literature Review

Methodology

Chapter 01: Introduction

Background of Study:

The global financial crisis has shaken the economies of all parts of the world. The international financial collapse started in the mid of 2007 and proceeded until 2008. The stock markets have fallen immediately in different parts of the world. Not only this, the survival of financial institutions was in danger. The uncertainty and risks in the business transactions exceeded beyond imagination and one after another, many businesses failed. Therefore, the governments of all nations had huge pressures to come up with a strategy to reduce the hazardous impact of the financial crises. One of the initiatives in this regard is an improved system and policies of corporate governance (Berthelot, et.al, 2010, Pp.635).

The code of good governance or corporate governance should not be seen simply as a regulatory process that is intended to interfere with or regulate processes, but rather as the firm intention to demonstrate to stakeholders and investors that companies are transparent, effective, efficient and above all with a high sense of commitment to be better every day. Good corporate governance should not be considered as an issue than is fashionable, but as the real solution to the crisis of confidence and lack of credibility is perceived around the public sector undertakings and private, which reflect the results of their management operations and financial statements and questionable.

The Code of good corporate governance is based on logical principles and widely known in the financial field, such as equity, justice, honesty, and solidarity, both with interest groups to the same society in general that cannot be affected by the unscrupulous actions of white collar criminals settled in the power of corporations and public sector enterprises and private. However, this system has numerous flaws and challenges that need to be resolved in order to make it more effective and useful (Cadbury, 2005, Pp.7).

Individual investors are also concerned about the governance of the corporation in which they want to invest in. This is due to the fact that corporate governance directly affects the profitability and financial results of an organization. Takin a hypothetical example, consider a firm which is governed poorly. The organization is characterized by corruption and hiring is done on the basis of relationship instead of ...