Page 1 of 6
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 01
January 2019
Available online: https://ejbss.org/ P a g e | 526
Corporate governance
Darshna Rani, Gagandeep Kaur
Assistant prof. of commerce, Janta girl’s P.G College Ellenabad, Sirsa (Haryana) India
Abstract:
Corporation are the main player in global market .They are mainly responsible for generating
majority of economic activities in the world ranging from goods and services to capital and
resources. The essence of corporate governance is in promoting and maintaining integrity
transparency and accountability in the management of the company as well as making of
value principle and polices of corporation .Hence there is great need to increase awareness
among entrepreneurs about the various aspects of corporate governance .corporate
governance is a key element improving the economic efficiency of a firm .Good corporate
governance also helps ensure that corporation take into account the interests a wide range of
people as well as communities within which they operate .corporate governance is concerned
with set of principles ,ethics, value morals ,rule ,regulation and procedures .It establishes
system where director are attached with duty and responsibilities in relation to the direction
of company affairs ,this paper deal with the newly concept of corporate governance and how
it is beneficial for stakeholders its scope and role of corporate governance.
Keywords: stakeholders, corporate governance, accountability, management
Introduction
Corporate governance has become one of the most commonly used words in the current
global business vocalbluary.till about 80 and early 90 it was relatively an unknown word.
Corporate governance come into when the corporate sector in a number of countries was
surrounded with the problems of questionable corporate polices or unethical practices. India
too had its shares of scams, scandals flagrant violations of rules and regulations, harshad
metha stock scam of 1992, collapse of satyam in 2009, and the recent financial irregularities
at sport wear make Reebok India are the glowing examples of corporate fraud in the country.
Corporate governance has in recent year succeeded in attracting a good deal of public interest
because of its apparent importance for the economic health of corporations and society in
general. The concept of corporate governance is poorly defined because its potentially covers
a large number of economic issues. Corporate governance enables corporations to realize
their corporate objectives, protect shareholders rights, meet legal requirements and
demonstrate to a wide public how they are conducting their business. Good governance is
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Page 2 of 6
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 01
January 2019
Available online: https://ejbss.org/ P a g e | 527
essential for building goodwill and creditability managing companies efficiently and
transparently and preventing a variety of corporate crime like money laundering, kickback,
expense account pending and price bid rigging.
Meaning:
Corporate governance is the overall control of activities in corporations. It is also concerned
with ethics, value and moral of a company and its directors. The systems by which companies
are directed and controlled, board of directors are responsible for the governance of
companies. The role of corporate governance is to ensure that the directors of a company are
subject to their duties, obligations and responsibilities to act in the best interest of their
company to give direction. The corporate governance structure specifies the distributions of
right and responsibility among different participants in corporations such as board, mangers
shareholders and spell out the rules and process for making decision on corporate affairs. It
also provides the structure through which the company objectives are set, and the mean of
attaining these objectives and monitoring performance.
Objective of the study
The objective of the study to understand and define the term of corporate governance and
justify the relevance of corporate governance. It also explain the nature and scope of
corporate governance .the objective of corporate governance look ahead and predict the shape
of corporate governance in future and bring the interface between corporate governance and
business environment to sharp focus.
Research Methodology:
For the purpose of the present study mainly secondary data used. The required secondary data
was collect from the authorized books and officials website, various journals, diagnostic
various reports and newspapers and various famous authors books has been studying in
making the study.
Benefits of good corporate governance
1. Increase revenue or profit
Good corporate governance in a company makes ethical environment with the help of this a
company increase revenue or profits.
2. Increase in profitability
When a company gains attainable profits or revenues then the company achieves long term
profitability.
3. Growth in market shares
With the help of governance a company achieves the goal of the company that makes in the
growth in market shares. it is most beneficial for company and its shareholders.
Page 3 of 6
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 01
January 2019
Available online: https://ejbss.org/ P a g e | 528
4. Stability and growth
Corporate governance provides stability and growth of the company. When a company use
ethics a social environment being made then company automatic make stability and growth.
5. Building brand image
When a company satisfied its customers and other stakeholders of the company a satisfied
then customer make brand image for the company
6. Attract investors
Corporate governance attract a large number of investor’s investor invest its money in which
place that give maximum return. So corporate governance builds confidence among investors
or attracts more investors.
7. Reduce risk
Good governance attain a company well defined company and reduce all types of
risk.becausee in company many types of risk Attaining but corporate governance save all
types of risk that inherent in a company.
8. Satisfied stakeholders
Corporate governance satisfied stakeholders like shareholders employees suppliers creditor
government.
Concept of good governance:
1. Optimal utilization of resources
It is an important feature of company form of organization that shareholder/investor don’t get
a chance to participate actively in mgt. of company. It is responsibility of mgt to ensure
investor or stakeholder that their money is utilized in proper way investor money is not
employed in too risky project.
2. Effective leadership of chairman
Chairman is that person is the chief of board of director’s effective leadership increase level
of board of directors.
3. Proper communication.
Transparency in the company providing timely and true information to shareholder is a step
towards transparency. An organization provides timely and accurate information to increase
trust and confidence for investor and public.
4. Concern for stakeholders.
