Answer to Question #315718 in Macroeconomics for Faith

Question

Articulate how corporate/company law and governance mechanisms facilitate economic activity and how they respond

Answer 1

corporate governance refers to the way an organization is being run by the directors. it is about balancing the individual goals and societal goals as well as social economic goals.

Corporate governance affects the development and functioning of capital markets and exerts a strong influence on resource allocation.

It ensures that the organization is managed in a way that it can accommodate the interests of all parties involved

It ensures that corporates succeed in its ventures and economic growth .

Good corporate governance increases confidence in investors hence the capital can be increased effectively and efficiently.

Good governance ensures smooth running of the organization by eradicating corruption hence proper utilization of resources.