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© Irum Shahid

Strengthening Corporate Governance to Combat Corruption
‘I call on member countries to work urgently with us to address major corporate governance failures. This will be a vital step to reinforcing market integrity.’ - Angel Gurría, Secretary-General, Organisation for Economic Co-operation and Development (OECD). The collapse of global financial markets in September 2008 has ignited a debate on what caused their quick undoing. As captured in the comments of the OECD Secretary-General, there is a growing sentiment that poor corporate governance is one of the forces to blame. It allowed the transparency, accountability and integrity of companies to be compromised and for abuses to go unchecked, particularly on matters of corruption. w w w. t r a n s p a r e n c y . o r g

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1. 2. 3. Why is corporate governance critical? What is covered by corporate governance? Aligning corporate governance and anticorruption 4. 5. Recent reform efforts Moving the agenda forward

Strengthening corporate governance to combat corruption What is Corporate Governance? For TI, corporate governance is understood to mean the “procedures and processes for how private sector organisations are directed, managed 4 and controlled”. This includes the relationships between, responsibilities of and legitimate expectations among different stakeholders (Board of Directors, management, shareholders, and other interested groups). Laws and regulations provide the framework on which corporate governance systems are built. These are complemented by voluntary measures that companies adopt. When corporate governance systems are effective, they prevent managers from abusing the power that shareholders have granted them to represent their interests and the consent stakeholders have extended to them to operate in their communities. Stakeholders include any

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