Question

Corporate governance is an essential condition to the establishment of a stock
market, attracting major investment and developing national reserves.” Discuss.

Answer 1

Answer: There are multiple ways of defining corporate governance. From the investor's point of view, it is basically how a company manages it's relationships, especially how a company's management, it's board and it's shareholders deal with each other and external relationships, with the ultimate goal of reducing conflicts of interests and acting in the best interests of stakeholders such as shareholders, customers, suppliers, banks, government, society,etc. The board of directors is responsible and accountable for creating a framework that best suits the business conduct with its stated objectives.

Disclosure practices, executive compensation decisions and details, devidend policies, disclosure of related party transactions, procedure for reconciling conflict of interest between company, members in the board and shareholders.