Corporate Governanace: A Summary

Corporate GovernanceGood corporate governance is good business because it inspires investors confidence, which is very essential to attract capital. A few unscrupulous businessmen can, largely undo all the confidence built through the good work by the good companies over time. They need to be handled with iron hands.

However, corporate governance goes beyond the realm of law. It comes from the culture, mindset of management and cannot be regulated by legislation. The watchwords are openness, integrity and accountability.
Companies need not be myopic with short-term goals, caring only about quarterly results or immediate stock prices in the bourses, or that cherished P/E ratio. Good governance maximizes long-term shareholder value, which in turn takes care of short-term goals too.

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