Assignment: Corporate Governance


The term corporate governance can be define as the organizational system and relationship management between board, shareholders and stakeholders. Business activities merely affect external shareholders, which includes creditors, suppliers, purchaser and community member. Order  marketing assignment online.  The main function of such mechanism is to decrease the disorganization that comes out as the result of behavioral changes or unfavorable selection.

Internal and External Mechanism

Corporate governance states the policies and regulations at all levels in an organization which intends to develop system for accountability before upcoming failures. The mechanism controls internal and external activities of the company. The internal corporate governance determined the behaviors and then takes counteractive actions in attempt to achieve the basic objectives of the organization. Get  help with assignment  These includes for instance, monitory actions conducted by board, it comprises of regulatory policies executed by directors, management of the organization or internal auditors to attain efficiency in financial reports, operation agreement with organizational policies. Internal control activities can be either conducted by creditors or shareholders, as they are business investors and thus have due power to monitor the organizational performance. Corporate governance also determines that very board member should illustrate clear and similar objectives to accomplish. Corporate governance verifies that every shareholder must join and raise voices at general meetings because these are the members who addresses and develop recognition for organization among communities. For this venture should demonstrate transparency of the business activities with shareholder and must establish code of conduct to promote moral behavior for each board member.

In terms of organizational key activities to attain control over external corporate governance which practices by external shareholders of the company, such as government policies and regulations, performance evaluation and assessment, competition, market competition, acquisitions and others.

Agency Theory

There are number of theories regarding corporate governance, such as agency theory which refers to problem of promoting agent to work on behalf of the principal owner of the business. For the resolution of the problem the theory encompasses the conflict for associated cost this assure the performance of the agent according to principals desire. Hire professional  law assignment writer online. In contrast to stakeholder theory which reveals that business entities operates by undefined groups and thus have distinctive objectives to accomplish for the organization. The theory also suggests the role of every individual in the business and people to monitor corporate regulations. Stakeholders refer to buyers, customers, management, communities and other regulatory organization. The main feature of stakeholder theory of corporate governance determines that stakeholders are people who have invested in certain business to encounter benefits and each have different identified set of benefit. The theory refers business organization as profit generating system and diverse groups are reliant on organizational performance. There is also negative implication of the theory regarding that it is matter of concern that every member will elevate voice in the function of the firm.

Stakeholder Theory

Stakeholders are further divided into two diverse groups as a primary and secondary. Primary stakeholders are also called market stakeholders; the term includes suppliers, creditors, debt holders, buyers and member of staff. The other represents non-market stakeholders such as, community members, press and media, general public and support groups. Hire Perfect Assignment for  accounting assignment writing service. The question arises that why should business entities closely consider to develop relationship with stakeholder not only concern on wealth creation? The answer highlights the importance of corporate governance. The organizations are paying more attention to reconstruct their core values to incorporate stakeholders in making organizational decisions. The firms are emphasizing on strategic formulation concern with stakeholders retention management in reference to create long-lasting relationship. For example Swedbank is an organization which in context to link decisions with stakeholders taking proactive actions. Encouraging communication with stakeholders also determines solutions to various problems, such as hearing customers also maximizes the need for product research and grow market shares.


In terms of global operations, organizational mechanism for corporate governance encourages positive use of resources and accountability on their use. Effective control system is necessary ingredient for the success of the firm and equally important for economic growth. From the constructed discussion found that from the past few years firms are not only concerned with enhance shareholder wealth however emphasizes on recognizing stakeholders interests.  Get  help with history assignment. The study also determines that involving stakeholders in decision making establish improve communication with company. Corporate governance allows high business productivity with efficiency. The improved relationship with stakeholders seeks to develop positive reputation which indicates increase profitability. The phenomenon also determines that communities greet company’s presence in the market and investor enjoys investing in the firm which referent expansion in organizational activities. 

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