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The Corporate Governance Journey

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Submitted By patriciambatia2
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Corporate Governance is a Journey not a Destination. Discuss.
Submission by Patricia Mbatia

Definition of Corporate Governance: The system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.

Corporate governance became a pressing global issue following the 2002 introduction of the Sarbanes-Oxley Act in the U.S., which was ushered in to restore public confidence in companies and markets after accounting fraud bankrupted high-profile companies such as Enron and WorldCom.

Most companies strive to have a high level of corporate governance. These days, it is not enough for a company to merely be profitable; it also needs to demonstrate good corporate citizenship through environmental awareness, ethical behavior and sound corporate governance practices. These programs are ongoing and hence form the journey to good corporate governance.

Corporate governance stands for responsible business management geared towards long-term value creation. Views of corporate governance are shifting from mere obligation and compliance with laws and listing standards, to a business imperative for many firms. Corporate governance significantly influences the firm performance in the long term. It requires a sustained commitment and cannot be viewed as a one-time event or destination.

Good corporate governance is a key driver of sustainable corporate growth and long term value creation. Corporate

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