CORPORATE GOVERNANCE

Welcome to Presentation on Corporate Governance

Prepared by:Aamir khan M.B.A FINAL YEAR

STRUCTURE
INTRODUCTION OF CORPORATE GOVERNANCE. FRAMEWORK OF CORPORATE

GOVERNANCE. NEED OF CORPORATE GOVERNANCE. C.G PRINCIPLES FOR PUBLIC SECTOR. GOOD GOVERNANCE BY VARIOUS PARTICIPANTS. RECOMMENDATION. CONCLUSION

What is Corporate Governance ?

Corporate Governance refers to the structures & processes for the efficient & proper direction & control

of companies (both private and public) in the interest of

all stakeholders.

CORPORATE GOVERNANCE

What is Corporate Governance ?

- Basic Principles of Corporate Governance;

Accountability Transparency Fairness Integrity Responsibility

Rights of Shareholders Interests of Stakeholders Good Faith Trust Controls Diligence Disclosure Commitment

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Corporate Governance Framework

Governance Principles Legal / Regulatory Codes of Best Practice Stakeholder Relations Self Regulation Ethical Standards Risk Management

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Enhances performance of companies

NEED OF CORPORATE GOVERNANCE

Enhances access to capital

Enhances long term prosperity. Provides a barrier to corrupt dealings- limiting

discretionary decision making, increasing oversight, introducing Codes of Ethics etc

Impacts on the society as a whole:

CORPORATE GOVERNANCE

Good Corporate Governance and Good Public Governance are complementary

The proper governance of companies will become as crucial

to the world economy as the proper governing of countries.

James Wolfensohn President of WB, 1999

CORPORATE GOVERNANCE

Corporate GovernanceChannel of Growth & Development

Country level

Sector level

Individual firms

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Corporate GovernanceChannel of Growth & Development

Increases access to external financing leading to larger

investment, high growth & creation of more jobs

Better allocation of resources Better management creating wealth Reduces the risk of financial crisis Better relationship with all stakeholders

CORPORATE GOVERNANCE

Corporate GovernancePrinciples for the Public Sector

Generally derived from the private sector

Ensures public accountability

Promotes responsive and accountable institutions Good financial management of resources Good stewardship
Responsibility to protect the wealth of the state and its citizens Maintain and safeguard it in the interest of the citizens

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Good Corporate Governance, Good Government & Good Business go hand in hand
Good Governance by Host Country

Good Governance by Private Sector

Good Governance by Investment Promotion

Agencies
Good Governance by Investors

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Good Governance by Host Country

Transparent, stable and predictable investment climate: Appropriate legislation to support investment Anti corruption measures Effective , speedy and transparent resolution of disputes Forum for Investors Capacity Building

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Good Governance by Private Sector

Institutional Framework

Role of Board of Directors

Management

Risk factors
Transparency & Disclosure

Reputation

CORPORATE GOVERNANCE

Good Governance by Investment Promotion Agencies

Self Regulation

Transparency & Disclosure

Accountability

Commitment
Sound and Clear Administrative Policies

Stakeholder engagement

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Good Governance by Foreign Investor

Good faith

Business Integrity
Governance Policies

Human Capital
Corruption Practices

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Recommendations
Continued advocacy on the benefits of Corporate Governance Codes of Corporate Governance for countries Capacity building Sourcing of funds to support Corporate Governance development. Every institution , every stakeholder should provide input into the corporate governance agenda

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Conclusion
If a country does not have a reputation for strong corporate governance practice, capital will flow elsewhere. If investors are not confident with the level of disclosure, capital will flow elsewhere. If a country opts for lax accounting and reporting standards, capital will flow elsewhere. All enterprises in that country- regardless of how steadfast a particular

companys practices may be- suffer the consequences. Markets exist by the
grace of investors. And it is todays more empowered investors that will determine which companies and markets will stand the test of time and endure the weight of greater competition. It serves us well to remember that no market has a divine right to investors capital