CORPORATE GOVERANCE

Mr. Ashish Makwana

Mr Ashish Makwana
 CONCEPT OF CORPORATE GOVERNANCE
According to the Cadbury Committee,
corporate governance is the system by
which companies are directed and
controlled. The board of directors is
responsible for the governance of the
company. The shareholders role in the
governance is to appoint the directors and
the auditors and to satisfy themselves that
an appropriate governance stature is in
place.
Mr Ashish Makwana
 Con
Governance, derived from the word
Gubernare, means to rule or steer.
The word Governance according to
Oxford Dictionary is governing or to
rule. Therefore, governance is to control.
means the set of arrangements for
sharing power and enforcing
accountability between the
shareholders, directors and managers of
a company.
Mr Ashish Makwana
 DEFINITIONS
J Wolfensohn,President, World Bank:

Corporate Governance is about promoting

corporate fairness, transparency and
accountability.
Kumar Mangalam Committee Report on
Corporate Governance, 1999.
The fundamental objective of corporate
governance is the enhancement of long term
shareholder value while, at the same time,
protecting the interests of other stake
holders. Mr Ashish Makwana
 Con
The Institute of Company Secretaries of
India (ICSI)
Corporate Governance is the mechanism
by which the values, principle, policies and
procedures of a corporation are included and
manifested.

Corporate Governance is the system

through which companies are directed and
controlled in the best interest of
stakeholders.
Mr Ashish Makwana
Mr Ashish Makwana
Corporate Governance Effective Management of Relationship

Shareholders Creditors Community

Board of directors
Accountable Non ExecutiveExecutive director

Independent Director
Management led by CEO

Suppliers Customers Employees

Mr Ashish Makwana
Mr Ashish Makwana
 OBJECTIVES OF C. G
Transparency of corporate structures and
operations.
Accountability of managers and the board of
directors to shareholders.
Corporate responsibility towards stakeholders.
Creating long-term trust between companies
and the external providers of capital.
Rationalizes the management and monitoring of
risk that a firm faces globally and assures the
integrity of financial reports.
Mr Ashish Makwana
 ADVANTAGES OF C. GOVERNANCE
A better managed company & Increased
management credibility.
Greater analyst, Improved access to, and lower cost
of capital.
The realization of a companys true underlying value.
Good governance provides comfortable share and
competitive advantage in the global market place.
Good governed companies can raise capital widely
easily and cheaply from domestic and foreign
markets.
Good governance becomes strong image self earned
reputation like brand equity and providers positive
goodwill..
Mr Ashish Makwana
 Good corporate governance leads to improve
employees morale and finally higher productivity.
Good governance is the mirror of good human resource
and judicious use of financial resources.
Good governance is shaping of the growth and future of
the company.
Good governance maintaining the steady and improved
trade record.
Good governance is essential not only in order to gain
credibility and trust, but also as a part of strategic
management for survival, consolidation and growth.
Essential for creation of wealth.
Good governance improves corporate excellence due to
presence of trust
Mr Ashish Makwana