Benefits of Corporate Governance

Benefits of Corporate Governance

What is corporate governance:

Corporate governance is nothing but the set of principles and systems which governs a company and helps in its successful running.  All the sum total of factors which contributes in giving guidelines towards the correct running of a company is known as corporate governance.  These may include the board of directors, the shareholders, the employees, and the society.

Benefits of corporate governance:

Corporate governance ensures running of business with integrity and fairness.  This will boost the investor confidence.  Especially in the world of finance, we debate on the credibility of even apps like bitcoin trader and seek full review to understand better.  Any action which impacts the trust factor will be devastating on the entire domain of business and finance.

Ensures fair returns to all stakeholders:  Corporate governance ensures fair returns to all stakeholders like employees, government, shareholder etc.

The positive increase of share price:  Good corporate governance leads to the good functioning of the company.  Hence share prices improve.

Removes corruption and reduces risk:  Corporate governance aims at setting up a good internal control system and monitoring.  Hence corruption and unethical practices are removed from the organization.  Once organizations are in the path of ethics, the entire economy will flourish and move towards a risk-free environment.

Brand image development:  Good corporate governance removes happening of unethical incidents in a company.  Hence building a positive brand image is possible.

Lowers legal action and penalties: Good corporate governance helps in setting up good standards and practices in a company.  In the present environment, any business has to satisfy so many compliance and legal norms.  Deviation will lead to penalties.  Similarly, frauds and non-commitment invite filing of legal suits against the company.  All the legal expenses and penalties can be avoided because of corporate governance.

Increases harmony and reduces fraud:  Corporate governance helps all the stakeholders to contribute effectively to the company.  This will help in fraud reduction and increases harmony in society.  This will lead to a peaceful and healthy living.  There will not be unrests and criminal activities.  This will ensure good economic growth which leads to an increase in income and consumption.  Growth in consumption, in turn, boosts up production and sales.  Hence the benefit of corporate governance reaches all the hands of society.

 

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