Answer to Question #203886 in Management for TAM

Question

Subject : Business Ethics and Corporate Governance

"Good Internal Corporate Governance Mechanism provides basis for sound commercial decision making." Comment. ( please answer in 150 words)

Answer 1

Corporate governance is the system of rules, practices, and processes by which a firm is directed and controlled. Corporate governance essentially involves balancing the interests of a company's many shareholders, senior management executives, customers, suppliers, financiers, the government, and the community. A good corporate governance mechanism provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate.

Companies that embrace good corporate governance mechanism achieve greater accountability in their investment decision-making processes. A good corporate governance mechanism enables company boards to prioritize accountability when making investment decisions. A good corporate governance mechanisms address deficiencies in the corporate governance system by recommending a comprehensive set of norms on the role and composition of the board of directors, relationships with shareholders and top management, auditing and information disclosure, and the selection, remuneration, and dismissal of directors and top managers.