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Essence of Corporate Governance

Author(s): Prachi Singh

Journal: International Journal on Research and Development : A Management Review
ISSN 2319-5479

Volume: 1;
Issue: 1;
Start page: 58;
Date: 2012;
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Keywords: Corporate Governance | Directors | Transparency | Ethical | Management.

"Success is not the art of making mistakes when nobody is looking at, true success is the truthful expression of the performance when it is measured”.” Business is going to change more and more in the next ten years than it has in the last 50 years. These changes will occur because of a disarmingly simple idea: the flow of digital information. Who does not like the progress? Progress leads to success in terms of satisfaction of desires and expectations. When any individual compares his past performance with the present and when the graph is upward then individual appreciates himself or herself. The same is in the case of corporate or country or any country's economy, which want to be sound then they need success. But success is not simple to get. Now days there are many ways through which success can be achieved. The ways can be short cuts or may be long ways, where more sincerely and ethically one has to work. Corporate governance can be put in this 2nd category .Corporate Governance is the term given to the management practices followed by the business organization. Corporate governance is a way of life and not a set of rules. It is more of a way of life that necessitates taking interests in every business decision. It has succeeded in attracting a good deal of public interest because if it's apparent importance for the economic health of corporations and society in general. We know each corporation obtains its funds from different class of investors. When they do so, it becomes their prime responsibility to see that the funds are used in proper direction. The investors are also even needed assurance for such matter. "Corporate governance deals with the ways in which suppliers of finance to corporations assure themselves of getting return on their investment.” It has emerged as one of the key elements of public policy reforms individuals. It is still in its infancy; it has been around only for the last three to four years. It is however not a foolproof concept as it relies heavily on data available from insiders. A key element of good corporate governance is transparency projects through a code of good governance which incorporates a system of checks and balances between key players- board of management, auditors and shareholders. Corporate governance is defined as the system by which business entities are monitored, managed and controlled. Corporate governance practices have become an essential prerequisite for the ability to acquire and retain financial resources necessary for restructuring long term investment and sustainable growth. At one end of the spectrum the shareholders are the owners of business entity as they are risk takers. At the other end the managers or the executive director of the company who are in control of its day-today affairs. It is the responsibility of entire board of directors for smooth running of the company; corporate disclosure and governance requirements though relatively low in some countries, are also changing. Awareness of the developments of accounting standards, securities regulation, globalization of financial markets, world wide effect of corporate strategic alliance has led to some alternative view of governance process. A good structure of corporate governance is that encourages balanced relationship among shareholders, executive directors and the board of directors
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