Corporate Governance
A regulation refers to a law or rule designed to govern or control the conduct of a person, group, or corporation. Regulation limits, constraints and creates a right, allocates responsibility and limits or creates a duty. Regulation may take the form of legal restrictions that are promulgated by a federal authority. It also has contractual obligations that are meant to bind the parties involved. This report endeavors to explain how legislative reactions to regulate different business activities can be prevented. It also endeavors to explain about the challenging arguments presented by Professor Manne and the proposal he made for unregulated corporate system.
Corporate scandals that lead to business regulation
Numerous corporate scandals have prompted reforms on the business practices resulting increasing regulation. Some of these corporate scandals include cover-ups, greed, and dishonesty. The business corporations should answer back to the public: for this reason, they should uphold responsibility and accountability in the corporate behavior.
How government policy affects businesses
Governments are responsible for the creation of frameworks and rules in which different business organizations are able to compete against each other. Sometimes the rules change and in turn force the organizations to change the way they operate. The ways in which the regulation procedures by the government affect businesses are many. First, the government interferes with the economic policy. For example, between the years 1945 and 1979, the federal government interfered with the economy through the creation of state-run industries that took the form of public corporations.
Another way through which the government interferes with the economy is through the increase of tax. Corporations are forced to pass the costs to consumers. The government can also interfere with the economy policy through the increment of interest rates. Increase in interest rates raises the costs to the business corporations borrowing money. This forces the consumers to cut down their expenditures and in turn leading...
Corporate Governance: A review of Literature What is Corporate Governance? Principles of Corporate Governance Theoretical foundations of corporate governance Agency theory Stewardship theory Stakeholder theory Post-Enron theories Corporate Governance: The changing trends Recent developments on regulatory front and research Corporate Governance: Relationship with market indicators Venture Capital Model: Impact on Corporate Governance Appendix I- Examples of Corporate Governing bodies This paper is a review of pertinent literature on corporate governance. Corporate governance addresses the control issues created due to the separation of ownership
It should not be treated as a separate exercise undertaken to meet regulatory requirements." (ICA, 29) Here is expressed a philosophical impetus that drives the focus of this research, that such compliance which will generally concern matters such as corporate accounting, the practice of internal oversight and the practice of financial transaction must be considered inextricable from other aspects of practical, procedural and legal operation in terms of its
But the shareholders themselves need to be more aware and more involved in their company's business in order for any meaningful change to sustain itself: Shareholders, the intended beneficiaries of the corporate vehicle, are the ultimate capitalists: avaricious accumulators with little fiscal risk and no legal responsibility for the way in which they pursue their imperative to accumulate. Shareholders, not corporations, show indifference to the needs and values of society. It
For example, Shu-Acquaye (2007) cites the basic differences in the legal systems in various parts of the world as contributing to the different approaches to corporate governance. Likewise, Shu-Acquaye cites these differences and adds, "The American corporate governance system adheres to the idea of shareholder primacy. Because the United Kingdom, Austria, and Canada share a legal system based on English common law and equity principles, they are similar to
4. If Enron shareholders had been fully aware of the LJM partnership agreement, do you believe they would have been willing to continue investing in Enron? LJM was created by Fastow allegedly to buy poorly performing Enron assets, but in reality to hide debt and inflate profits of Enron in order to leverage its stock price. It is almost certain that Enron shareholders would have ceased to continue investing in Enron
By addressing this issue that concerns all customer segments, our company might even expand its line of products by developing products that address these customer segments. In conclusion I must make it very clear that it is imperative that our company, as well as other companies activating on the Chinese market, no matter what their area of activity is, are obliged to improve consumer confidence. One of the best and the most durable ways of
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