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Corporate Governance

What is Corporate Governance

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Corporate governance is maximizing the shareholder value in a corporation while ensuring fairness to all stake holders customers, employees, investors, vendors, the government and society-at-large. Corporate- governance is about transparency and raising the trust and confidence of stakeholders in the way the

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What is CG Giving directions to the enterprise with the aim of satisfying legitimate expectations for accountability and regulation by interest beyond the boundaries. Maximizing shareholders value in corporation while ensuring fairness to all stakeholders, customers, employees, investors, vendors, govt and society. CG is about transparency and raising trust and confidence of stakeholders in the way company runs.
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Who are the players

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Three players First, the shareholders who have invested their money in the corporation. Second, the executive management that runs the business and is responsible to the board of directors. And third, the board of directors which is elected by the shareholders and is accountable to them. The corporate governance problem, according to economists, is about minimizing agency cost or the cost of managers who manage the corporation on behalf of shareholders. Thus, in other words, the primary corporate governance problem is to ensure that we do not create asymmetry of benefits between different sections of shareholders-generally, the owner managers of a company and the rest of the shareholders.
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Why this topic has gained so much of importance

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Many instances of fraud and misuse in the corporate world. Inflated revenues, conflicted analysts, boards of directors who fail to perform their duty. Global capital is free to move wherever it finds a hospitable environment. Unless a corporation follows the highest degree of transparency and the best principles of corporate governance, it is unlikely to attract world-class investors. career opportunities to work for reputed multinationals in India.

Pillars of CG
Accountability Transparency Fairness Independence

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Accountability

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Accountability Ensure that Mgt is accountable to Shareholders and Shareholders are accountable to managers. Fairness Protect shareholders right Treat all shareholders including minorities rightly Provide effectiveness for violations
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Corporate Code of Ethics

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Why important Help to resolve/ reject unethical issue, as per company policy. Framework to help the members of orgn to evolve higher levels of character and human values.

Interest of CG

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To make directors realize their job To safeguard interest of shareholders because of rise in investors To protect interest of SHHL as mergers , acquisitions take place easily. Leadership values

How to promote value based CG

Value creations for employees Value creation for consumers Value creation for investors and stakeholders.

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