Corporate Governance frameworks Essay Example | Topics and Well Written Essays - 1000 words

Corporate Governance frameworks - Essay ExampleSummary and conclusions Page 10 7. References 1. Introduction Corporate politics is vitally important to the economic well being of a modern capitalist economy. In complex organisations with variety of interested parties and many potential conflicts of interest, somatic governance can inform these parties about the organisations activities and also protects stakeholders rights through monitoring and control. This report aims to critically compare the UK and US systems of integrated governance, where this term is more narrowly defined as relating to the accountability of decision makers, and excludes from consideration the role of merged governance in increasing organisational efficiency. The report is structure in to six personas. The first section, this introduction, explains the purpose of the report and gives a broad outline of the way the argument will be constructed, as well as what bases of evidence it will draw from. The sec ond section gives an overview of the generic role of in corporeald governance, its history and development, as well as explaining why it is necessary. The third section will describe the different approaches to corporate governance in the United Kingdom and the United States respectively. ... The UK and US responses to such scandals will be contrasted and the relative advantages and disadvantages of their systems of corporate governance will be discussed.the The sixth and final section will summarise the arguments made and outline the major conclusions resulting from the analysis. 2. The aims of corporate governance Although, various definitions of corporate governance exist, this report will take the following as its working definition (Sir Adrian Cadbury (2000) in Global Corporate Governance Forum, World Bank), because it effectively highlights the key issues that the following analysis will address Corporate Governance is concerned with holding the balance between economic and s ocial goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. This neatly summarises the reason for the institution of corporate governance. Modern businesses pass on a variety of stakeholders whose interests may conflict however, it is the case thatthe control of the organisation is skewed heavily towards a single subset of this group, the managers. Therefore, a system of checks and balances is required to care the rights of all stakeholders. Corporate governance can be viewed either through the lens of Principal-Agent Theory, or Stakeholder Theory. Principal-Agent Theory is in the tradition of economic studies of asymmetric discipline (Mirrlees, 1975) and theories of the firm (Gibbons, 2005) and provides a focused analysis by distilling the problem down to the basic separation of ownership and control that shareholders o wn the