Reflection on Corporate Governance

Running head: REFLECTION ON CORPORATE GOVERNANCE
REFLECTION ON CORPORATE GOVERNANCE
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Author Note

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REFLECTION ON CORPORATE GOVERNANCE
This essay aims to reflect the insightful connections of my present experiences regarding
corporate governance and risk management issues. The structure and function of the economy
have gained attractions from all domain of the social organization. The essay contrasts the
understanding in the field of political, social, and cultural orientations at the corporate level. This
paper aims at discussing the characteristic features and the issues related to corporate governance
and risk management from my personal experiences. It presents its role and importance with the
support of theories and practices followed in different organizations. It also includes corporate
social responsibility and its increasing demands in the present scenario.
According to me, corporate governance refers to the idea of management and governance
of the company with the help of set rules, principles, practices and guidelines. Its structure
determines the rights and responsibilities among the primary participants of the organization
such as the board of directors, the managers and the shareholders. They collectively, provide the
guidelines to direct and control the organization in order to fulfil its goals and objectives. The
organization brings out some practical features of corporate governance that is the commitment
of values, ethics and disciplines to the underlying principles. Its power is exercised over a
corporate identity (Clarke 2016). The corporate governance, in my view, seems very systematic
and has a universal application voluntarily all over the world. It is based on laws, practices and
procedures that is made to protect the stakeholders’ right and increase the shareholder’s wealth.
It deals with certain obligations where the board members are accountable to them. From my
personal experiences, good corporate governance facilitates the effective management by
contributing to the better performance and proper functioning of the organization in the
economy. It is important as it determines the financial health of the organization and has a
bearing of risk on investors’ perception (Subanidja 2016). The good corporate governance

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REFLECTION ON CORPORATE GOVERNANCE
measures the lower risk that is reflected in the shareholder value and capital costs. It is the
essential criteria for the foreign institutional investors to decide upon which company to invest
in.
The Organization for Economic Cooperation and Development is an international
benchmark set for the policy makers, different investors, corporations and the stakeholders
globally. It has proposed certain principles for the development of good corporate governance
(Davies 2016). The building of OECD principles includes the following: It ensures the
framework that provides the basis of effective corporate governance. It securely protects and
facilitates the right of the shareholders and principal owners. The equal treatment is provided to
all shareholders, minor, major or foreign shareholders. The board members directly or indirectly
disclose the matter related to governance to the shareholders. The framework recognizes the role
of stakeholders and their rights established by law. It ensures that the accurate and timely
information is disclosed regarding the performance, financial situation ownership and
governance of the organization. The governance framework provides effective monitoring by the
board members and the strategic guidance of the organization to be culpable to the company and
the shareholders (Şahin 2018).
The organization faces external and internal risks that are not in control of the
management. The risk management is considered as the prime cause of uncertainty in the
organization. The good corporate governance focuses on identifying the risks and managing
them before it affects the business. The knowledge of the risk and the ability to control it helps
the organization to act confidentially and take better future decisions (Hopkin 2018). The
corporate risks arise at three different levels, and they are strategic, management and operational.
The strategic level risks are the threats from the outside of the organization. The management