Corporate governance is important for companies to protect shareholder interests and manage risks. It involves transparency, accountability, and oversight between key stakeholders like shareholders, management, and boards of directors. Not applying effective governance can lead to financial failures, loss of shareholder rights, and lack of transparency deterring investment. Risks include mismanagement, abuse of power, loss of foreign investment, and withdrawal of capital. Governance aims to standardize responsibilities and achieve fairness, efficiency, and optimal resource use through transparency and accountability.

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Instructor: Dr. Lobna El Dessouky
Prepared by
Mohamed Mohamed Abdel Kader Elzanaty

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Introduction
Corporate administration is a critical issue for all local and universal organizations within recent
memory. The money related emergency endured by the nearby and worldwide economy has
put corporate administration as a need. He additionally thought about the expression
"administration" a term that was quickly spreading universally due to the absence of laws and
controls administering the direct of business and business exercises, which prompted
numerous instances of liquidation and monetary hardship of numerous vast organizations and
influenced countless and capital proprietors.
In any case, there is a hindrance to the speed of accomplishing these objectives, in particular
debasement, which has turned into the worry of the entire world, regardless of whether poor
or rich nations Debasement has turned into the worry of the whole world, both poor and rich
nations, which mutilate universal exchange and venture streams and encourage sorted out
wrongdoing. Debasement likewise happens at open private contact lines, where regulatory
defilement is a capacity Government organization and even private ones are only an outflow of
awkwardness in the administration of the state and a deviation from the establishments for
which these foundations were built up. New vocabulary rose, for example, corporate
administration, which implies more mediation and supervision. There is most likely that
administration has turned out to be vital in battling Corruption, particularly in perspective of
the present change of the world into a market economy, in which privately owned businesses
play a huge and compelling job, with the resulting need to screen and assess this job.
In the light of the above, my Prospectus will include:
1. What is Corporate Governance?
2. Different governances to be addressed in project finance.
3. What are the risks involved in not applying effective governance in project finance?
4. Conclusion of the research findings.

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1. What is Corporate Governance?
A. The Concept of Governance.
There are several definitions of governance provided by international institutions, including:
 The Organization for International Development Cooperation (OECD) is a system by
which the business organization is directed and monitored, which occurs within a
framework of the Board of Directors, managers and other stakeholders.
 The International Finance Corporation (IFC) is the system through which companies are
managed and controlled.
 The Arab Society of Certified Public Accountants (ASCA) is a group of responsibilities and
follow-up that raises the Board of Directors and requests prices and related
administrative procedures.
 UNDP defines the concept of "governance" as the exercise of economic, political and
administrative power to manage the affairs of the State at all levels. It includes
mechanisms, processes and institutions, through which citizens and groups express their
interests, exercise their legal rights, fulfill their obligations and accept mediation to
resolve their differences.
 The World Bank defines the concept of "governance" as the rule based on traditions and
institutions through which authority is exercised in the State to serve the public good.
This definition includes: the selection, monitoring and replacement of power, the ability
of the government to manage resources and effectively implement sound policies, And
respect for both citizens and the state for institutions that govern economic and social
interactions among them.
 Institute of Internal Auditors (IIA) The Institute defines "public sector governance" as the
policies and procedures used to guide the organization's activities, to ensure that its
objectives are met, to conduct operations in an ethical and responsible manner, and to
assess governance in the public sector The desired objectives through activities that
ensure the credibility of the government, justice in the provision of services, and ensure
the proper and moral conduct of government officials to reduce the risk of financial and
administrative corruption. The system is the one that governs the relations between the

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main parties that affect the performance within any organization. It includes the basic
administrative elements of the organization's success, its long-term stability and the
determination of responsibilities within it, while guaranteeing the rights of all parties
that are related to the organization and justice.
Unlike all previous academic definitions, the best definition of governance is:
It is a set of procedures and rules adopted by companies and institutions to protect their assets
and properties, manage their investments efficiently, improve economic performance and
increase productivity, and provide investors, shareholders and shareholders with a secure
return on their investments while ensuring their rights. Manage companies in achieving goals
and making appropriate decisions and straightforwardness in an organization's association with
its all partners (lenders, clients, administration, representatives, government, and the network).
B. Key stakeholders in governance.
stakeholders
managers
board of
directors
share
holders

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c- Corporate Governance Practice Framework .
D- Corporate Governance Important
Importance: The Company that implements governance is organized and responsible directly
and impartially and is fair to its investors and some other partners.
In spite of what can be expected, the management of weak companies is driven by waste and
crime. In addition, it must be emphasized that corporate governance is very important and
necessary for companies and state-owned enterprises as well as for the private sector.
E - The benefits of corporate governance
Consistency with the corporate governance standards can benefit their owners and heads of
organizations lead to righteousness and increase awareness of:
 Improve access to capital and budget.
 Help make duty inevitably aggressive condition through mergers and acquisitions,
associations, reducing risk.

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 Resources provide arrangement of furlough and guarantee smooth intergenerational
exchanges of wealth and family resources, and furthermore decrease fire for intractable
cases out (necessary for speculators).Receive significant corporate governance risk in
addition, demanding higher arrangement of internal control, and then push the
responsibility mentioned more and better net income.
 Good corporate governance practices can prepare for future development, expansion,
or come to an agreement, including the ability to draw on specialized financial value –
and abroad – as well as lower cost of credit/predecessor organizations.
 Many organizations looking for new assets regularly end up obliged to try real changes
in corporate governance amazing cost and benefit of the outcasts regularly during the
emergency period. At this point when preparing financial experts now and facilities for
potential accomplices would have more confidence in resource mode or expansion of
the Organization's activities?
F- Characteristics of the corporate governance system
2- Different governances to be addressed in project finance.
Despite the different definitions and importance, the importance of corporate governance
varies according to the different perspectives of the key partners in project financing.
TransparencyAccountability
Independence
Social
Responsibility
Discipline Justice

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A- shareholders
 Big corporate governance can give the right incentives to the board. The management is
pursuing goals that are in the light of the legitimate concern of the organization and
investors, in addition to encouraging the company to achieve its goals successfully.
 Corporate governance can better give shareholders greater security over their project.
 Corporate governance ensures better performance. In addition, investors receive
adequate education on options on key issues such as decision or consolidation
amendments, and presentation of benefits.
One of the most important things emphasized by the rules of governance is shareholders'
equity these rights:
 Ensuring secure ways to register share ownership.
 Transfer of ownership of shares.
 Get the necessary information about the company in a timely manner on a regular basis.
 Participation and voting in the general assembly of the company.
 Participation in the Company's profits.

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B- Lender.
 The governance of large companies gives incentives and incentives to both investors
and lenders because it gives the project more transparency and disclosure for all
steps and phases of the project.
 Corporate governance gives investors and lenders more safety on their investment
in the project by identifying all expenses and stages through escrow account
C- Stakeholders
 We have already mentioned the categories of stakeholders in the company, who are
shareholders, Board of Directors, and Executive Management is the key
stakeholder’s in Company. In this context, the corporate governance framework
should be recognized to the interests of the stakeholders established by law and to
promote active collaboration between companies and stakeholders in creating
wealth, opportunities work and enterprise sustainability.
D- Board of Directors
The most important responsibilities of the Board of Directors:
 Preparing and steering the company's strategy, work plans, Budget estimates, risk
policy, performance objectives, evaluation and review implement plans.
 Oversee and follow company practices and make changes if Necessary.
 Selection and identification of bonuses, salaries and supervision of senior executives
of the company.
 Monitor and manage any potential conflicts in the interests of the Company, the
Board of Directors and shareholders.
 Ensure the integrity of the accounts of the company and the systems of preparing its
financial statements and the approval of the financial reports of the shareholders on
a regular basis.
 Supervising disclosure processes.

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E- Government (the National Economy).
 The government grants licenses to large companies and often plays the role of
partnership in the project. Therefore, the country should apply corporate governance to
participating enterprises in order to verify the realization of the principle of disclosure
and transparency at the internal level of the project and at the external level. The state
and other stakeholders have always had financial and economic implications, so
governments need to change and amend investment laws and projects to keep pace
with global economies and apply governance in public companies, governments and
ministries as well.
Finally, in the framework of corporate governance, all parties must ensure that the company is
properly disclosed time on all important matters related internally and externally to the
Company including the Company's financial position and equity.
The most important things to be disclosed:
 Financial results and operating results of the Company.
 The goals of the company.
 Major property rights and voting rights.

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 Policy of remuneration of Directors and CEOs and information on Board members,
including their qualifications, mechanism and selection.
 Operations related to parties of the Company.
 Expected risk factors.
 Topics for employees and other stakeholders.
 Governance structures and policies.
3. What are the risks involved in not applying effective governance in
project finance?
Failure to apply good governance within companies leads to confusion in the management of
the company and the occurrence of many problems and the creation of many risks such as:
 The possibility of financial failure resulting from mismanagement and the promise of the
distribution and abuse of power.
 Losses of the rights of small shareholders and other parties related to the company
resulting from the possibility of collusion of the major shareholders with the
administration to achieve personal interests.
 The dominance of a specimen on the management of the company, leading to the
possibility of corruption and the centrality of the decision and abuse of power
 Absence of a clear definition of the responsibility of the Board of Directors and the
executive managers before the stakeholders, leading to the possibility of a conflict in
decisions that result in confusion and deterioration in the results of the business
 The loss of opportunities to attract foreign investment and the confidence of lenders
and banks and sponsors in the work and performance of the company and to the
existence of transparency and disclosure and management clear, which requires the
capitalists to withdraw their investments.

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4. Conclusion of the research findings.
 Finally, we must understand and understand that corporate governance is one of the
main requirements of any company or institution in our time.
 Governance is a relationship between the stakeholders in the company (the
shareholders - the management of the executive company - the board of directors)
which is responsible for promoting the principle of transparency, accountability,
disclosure and accountability by determining the responsibilities and duties and rights of
each party and the separation of powers between them.
 Governance is working to develop a set of standards and rules that all parties must
implement in order to achieve the objectives.
 Governance promotes market efficiency, free movement of capital, borders and states,
promotes foreign investment opportunities and creates opportunities for the
establishment and construction of multinational corporations and corporations.
 Governance emphasizes the achievement of all its standards, the most important of
which is to achieve special equality between major shareholders and small
shareholders.
 Governance emphasizes the importance of the existence of principles and rules for the
establishment and composition of the boards of directors and the election and
determines their responsibilities and tasks required of them.
 Encouraging private companies, especially family businesses and government
companies, to implement governance rules.
Conclusion:
 A culture of governance aims to achieve optimal investment the capabilities of
companies and their resources by creating a working environment based on
responsibility, control and commitment and taking into account the principles of clarity
and transparency in determining the objectives of the company and its commercial and
strategic plans, together with the rights of each entity and its obligations, as well as
managing their relationships with suppliers and financiers Consumers and regulators
and their activities.