Andreas Schleicher presents at the launch of What does child empowerment mean...
Unit II PPT- Corporate Governance. notes
1. Dr.
Dr. M. Mohanasundari
M. Mohanasundari
Assistant Professor
Assistant Professor
Department of Management Studies
Department of Management Studies
Kongu Engineering College, Perundurai.
Kongu Engineering College, Perundurai.
2. Corporate Governance (CG)
• Effective CG systems promote the development of
strong financial systems and have an unmistakably
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Dr. M. Mohanasundari
strong financial systems and have an unmistakably
positive effect on economic growth and poverty
reduction.
• CG broadly refers to the mechanisms, processes and
relations by which corporations are controlled and
directed.
directed.
3. Definition of Corporate Governance (CG)
• A system of law and sound approaches by which
corporations are directed and controlled focusing on the
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Dr. M. Mohanasundari
corporations are directed and controlled focusing on the
internal and external corporate structures with the
intention of monitoring the actions of management and
directors and thereby, mitigating agency risks which may
stem from the misdeeds of corporate officers.
28. Principles of CG
• Rights and equitable treatment of shareholders
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Dr. M. Mohanasundari
• Interests of other stakeholders
• Role and responsibilities of the board
• Integrity and ethical behaviour
• Disclosure and transparency
29. Importance of CG
• Presence of an active group of independent directors
ensures confidence in the market
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Dr. M. Mohanasundari
ensures confidence in the market
• Foreign institutional investors are increasingly
depending of CG to invest in
• Have a positive influence on the share price of the
company
• Easier for companies to source capital at more
• Easier for companies to source capital at more
reasonable costs
30. Reasons for Development of CG
• Becht has identified five reasons why CG became so
prominent:
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Dr. M. Mohanasundari
prominent:
▫ The worldwide privatization wave
▫ Pension fund reforms and other institutional investors
▫ Mergers and takeovers
▫ Deregulation and capital market integration
▫ Economic crises
▫ Economic crises
33. Innovation Governance
• It provides the leadership and scrutiny instruments that
encourage the right behaviour, structures and processes
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Dr. M. Mohanasundari
encourage the right behaviour, structures and processes
to become embedded across an organization.
• It is not directly about how innovation is managed by
practitioners, but about how the Board of Directors,
CEOs and Senior Leaders promote and review
innovation practice on behalf of their stakeholders.
innovation practice on behalf of their stakeholders.
34. Innovation Governance
• It is important, since:
▫ It is the foundation of growth and competitive advantage,
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Dr. M. Mohanasundari
▫ It is the foundation of growth and competitive advantage,
creating and appropriating value in the private sector
▫ It is the only way to make significant advances to deliver
better for less in the public sector.
35. Future of CG
• CG, in the future, will reflect an increasing emphasis on
customer satisfaction as a way of measuring the
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Dr. M. Mohanasundari
customer satisfaction as a way of measuring the
adaptability of the organization over time.
• By focusing too strongly on financial records (and audit
committee work), the organization lose sight of the fact
that departments like operations and HR are very
important components (in forecasting future success).
important components (in forecasting future success).
