Corporate Governance and Companies Improvement

Corporate Governance
CORPORATE GOVERNANCE AND COMPANIES IMPROVEMENT
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Corporate Governance 1
Contents
Introduction..........................................................................................................................2
Corporate Governance.........................................................................................................2
The Role of board independence and Corporate Improvement...........................................3
Impacts of The Size of The Board on Firm’s Improvement................................................4
Role of Internal Auditing on Corporate Improvement........................................................6
Conclusion...........................................................................................................................7
Bibliography........................................................................................................................8

Corporate Governance 2
Introduction
Corporate governance denotes a system of procedures, rules, and practices a company
uses in safeguarding equality, clarity, and its responsibilities with the stakeholders. Corporate
governance is a framework that is intended to professionally steer the company in a way that all
of its values would be upheld in all of its undertakings. It is these principles that the company
uses to ensure that it is transparent, accountable, responsible, independent, and fair while
undertaking its work. Good corporate governance works within the rules and procedures that are
contained in the contract document that is signed between the company and its stakeholders. The
contract may include but not limited to duties, practices, remunerations, procedures for the
settlement of conflicts, channels for information and communication, and checks and balances
among others. This paper aims to conduct an analysis of the past literature on the part that
corporate governance contributes in the improvement of companies. The paper would mainly
focus on three internal mechanisms and their effects on corporate improvement in its
performance. These mechanisms are; the board independence, size of the board, and internal
auditing.
Corporate Governance
There are different definitions for corporate governance. Some scholars such as (Cornett
et al., 2008) have defined it as a mixture of varying mechanisms for directing and controlling a
company while the 1992 Cadbury Report defined it as a system for directing or controlling
companies (Cadbury, 1992). Essentially, corporate governance has two primary sides. According
to (Kamal Hassan, 2008), the first one is conformance which is denoted by monitoring,
supervision, and accountability to stakeholders. The second one is the performance which can be
denoted by corporate improvement through the contribution of the leaders. In a corporation, the