intro, history and impact Flashcards
module 1
What is corporate governance
A system of rules, practices, and processes by which a company is directed and controlled.
Encompasses the relationships and responsibilities between a company’s management, stakeholders, board of directors, and other shareholders
What are the primary objectives of corporate governance
Promote transparency, accountability, fairness, and integrity in the management and operations of a corporation.
Attract investment, maintain investor confidence, and foster long-term success
How does good corporate governance benefit a company
Promotes accountability, ethical behavior, and responsible corporate practices.
Enhances trust and strengthens the overall reputation and credibility of the company in the marketplace
According to Mathiesen, how is corporate governance defined
Corporate governance is a field in economics that investigates how to secure and motivate efficient management of corporations through the use of incentive mechanisms, such as contracts, organizational designs, and legislation.
According to the Journal of Finance, how is corporate governance defined
Corporate governance deals with the way in which suppliers of finance to a corporation ensure themselves of getting a return on their investment.
According to J. Wolfensohn, how is corporate governance defined
Corporate governance is about promoting corporate fairness, transparency, and accountability.
When did corporate governance emerge in the United States
Corporate governance emerged in the 1970s in the United States, as authorities began to focus on the inner workings of major companies.
What was the role of the Securities and Exchange Commission (SEC) in the development of corporate governance in the United States.
The SEC led the development of corporate governance, which began with legislation in the 1980s.
What was the impact of the Reagan-aligned parties on the development of corporate governance in the United States
The Reagan-aligned parties opposed the regulatory reboot, leading legal and economic scholars to develop a comprehensive package of rules.
When did investors and shareholders start to care more about their companies, and what was the impact?
Investors and shareholders began to care more about their companies after the 2008 economic crash, and this led to growing attention on business behavior and internal decision-making.
Which countries are considered early examples of good corporate governance?
The United States and the United Kingdom have been considered early examples of good corporate governance.
What was the Cadbury Report, and what was its impact
The Cadbury Report was introduced in the early 1990s in the UK and contained the framework for a new set of corporate governance rules, including the “comply or explain” concept, which has been copied in other national codes.
When did corporate governance become a focus in Europe, and what was the impact?
Attention began to fall on corporate governance in Europe in the early 2000s, but it failed to stop the high-profile losses of the late-2000s recession.
How is the regulation of corporate governance in the European Union evolving?
As the EU becomes more centralized in regulating markets, the rules for corporate governance within the bloc are becoming stricter.
When did corporate governance emerge in India, and what were the key events leading to its development?
Corporate governance emerged in India after the mid-1990s due to economic liberalization and deregulation of businesses and industries.
The concept had a long history, with the establishment of Bureaus of Industrial Costs and Prices, Tariff Commissions, the Industries (Development and Regulation) Act, and the Corporations Act in the 1950s and 1960s.
