Corporate Governance and Risk Management
Added on 2021-04-17
7 Pages1510 Words94 Views
Running head: CORPORATE GOVERNANCE AND RISK MANAGEMENTCORPORATE GOVERNANCE AND RISK MANAGEMENTName of the Student:Name of the University:Authors Note:
1CORPORATE GOVERNANCE AND RISK MANAGEMENTIn the current scenario, corporate scandals and degrading confidence in financialreporting among the creditors and investors have renewed the corporate governance practices inan organization. Corporate governance is the system through which companies are controlledand directed (Berger, Imbierowicz and Rauch 2016). It is the duty of upper management andboard of directors for proper governance of the companies. The main responsibility of the uppermanagement includes establishing the strategic aims of the company. The shareholder is the one,who governs the organization by appointing the auditors and directors. It is the duty of shareholders to satisfy the management that adequate structures were inthe place. I think the corporate governance is mostly about what the top level managementpractices to achieve the desired mission. They are the ones setting the values and standards of thecompany to maximize profitability and productivity. It is to be distinguished according to themfrom the daily operational management of the organization with the help of full-time executives. The primary purpose of corporate leadership is to generate profit both ethically andlegally. This therefore creates high level of satisfaction to the important five constituencies. Thisincludes employees, customers, vendors, investors and society at large (Soltanizadeh et al. 2016).The main aim of every organization is to ensure high profitability and sustainability year afteryear. An organization is generally a congregation of different stakeholders. It is important for thecompany to be transparent and fair to both the internal and external stakeholders while dealingwith all the transactions. The major essence of the corporate world is completely dependent uponpromoting compliance of law adequately. It should be practiced with transparency, high spiritand accountability.
2CORPORATE GOVERNANCE AND RISK MANAGEMENTWith the advent of globalization and changes in the economy, our corporate world needsa high-class governance system. It is vital for our firm to demonstrate and embrace ethicalconduct for effective management. The only tool that can help the management to achieve thedesired goals is via corporate governance (Iliev et al. 2015). It is a combination of strongcommitment for the management that safeguards shareholders interest, corporate ethics andopenness in ideas. Therefore, this helps in providing parameters of control, accountability, andreporting system by the management. This also helps in encompassing the interactiverelationship among various constituents that is required for determining the performance anddirection of the corporation. In the recent times, scandals and scams are undermining our lives to a large extent. Thechallenges and issues have been never so unpredictable and turbulent as they are currently.Therefore proper corporate governance is highly significant to foster the world economy. Goodcorporate governance mainly comprises of effective board that governs the organization withhigh integrity (Lebedeva et al. 2016). It is the board of our company that is responsible forachieving the objectives of the company. Moreover, the other factors like, business environmentand ethics creates an impact on our legitimate shareholders and societal interests. This furtherinfluences the long-term interest and reputation of our business enterprise. Corporate governance is not just about promoting transparency, accountability andfairness of corporate (Calomiris and Carlson 2016). In fact it is about finding a balance betweensocial and economic goals to work ethically. There have been various cases of excessive debtfinancing that is laced with frauds and executives unequal rise in payments. The largest scaminvolving ones the largest IT firm, Satyam Company has discredited the corporate governance
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