Corporate Governance
Executive Summary
In this report I am going to discuss the issues concerning corporate governance that have caught the attention of the business world in recent years. I will be looking at what sort of corporate behaviour created scandals and how the regulators and authorities responded to this. I will examine the effectiveness of the current governance rules that are in practice and conclude if they are adequate and analyse the costs and benefits of following these rules. Considering two alternative approaches towards dealing with governance I will decide upon whether self regulation or government legislation is the most appropriate method. My report will close with a summary. In order for me to obtain a good spread of information I have used various resources to assist me such as the internet, journals and textbooks.
Introduction
How can we define corporate governance? "Corporate governance is the system by which companies are directed and controlled", Cadbury report (1992). So we can see that it can be described as a means of controlling and ruling companies to act in the best interest of the company and its shareholders. "Corporate governance refers to the way in which companies are governed, and to what purpose", ICSA (2003). A company has a purpose to achieve its objectives and in order to do that it must follow guidelines or rules. Governance helps to provide guidelines and a direction for a firm to meet its objectives. "A company should be governed in a way that moves it towards the achievement of its objectives" ICSA (2003).
It has become quite clear in recent years that from the attention that corporate governance is receiving from the media that the subject has become a m ...