Mataracy
VIP Contributor
As we have governor in the state of country likewise we also need good governance in the company.
Management is concerned with running the business operations of a company while government is about giving a lead to the company and monitoring and controlling management decision so as to ensure that the company achieves its intended purpose and aims.
So management is about making decisions . Government is about monitoring and controlling decisions as well as giving leadership and direction.
As a company there should be separation of ownership from control.
Since a company is a legal person. Its exist different or independent of its shareholder, who owns it.
Though sometime there use to be problem from separation of ownership control.
There is a problem because the directors of a company might be able to run the company in away that is not in the best interest of the shareholders.
But when the company is controlled by a majority shareholder,problems with good governance are unlikely ,because the majority shareholder has the power to remove any directors and so can control decision by the board of directors
Where there is good governance; there will be:
(1) Fairness :There shareholder will receive fair treatment from the directors.
(2) There will be openness or transparency. There will be clear infoemation and no information will be withhold.
(3)There will be indipendency . No one will be able to influence somebody
(4) There will be honesty and integrity.
(5) There will be responsibility and accountability etc.
If really that a company want to be operating succefully then all these must be put in to consideration.
Why do we need good governance in our company??
Management is concerned with running the business operations of a company while government is about giving a lead to the company and monitoring and controlling management decision so as to ensure that the company achieves its intended purpose and aims.
So management is about making decisions . Government is about monitoring and controlling decisions as well as giving leadership and direction.
As a company there should be separation of ownership from control.
Since a company is a legal person. Its exist different or independent of its shareholder, who owns it.
Though sometime there use to be problem from separation of ownership control.
There is a problem because the directors of a company might be able to run the company in away that is not in the best interest of the shareholders.
But when the company is controlled by a majority shareholder,problems with good governance are unlikely ,because the majority shareholder has the power to remove any directors and so can control decision by the board of directors
Where there is good governance; there will be:
(1) Fairness :There shareholder will receive fair treatment from the directors.
(2) There will be openness or transparency. There will be clear infoemation and no information will be withhold.
(3)There will be indipendency . No one will be able to influence somebody
(4) There will be honesty and integrity.
(5) There will be responsibility and accountability etc.
If really that a company want to be operating succefully then all these must be put in to consideration.
Why do we need good governance in our company??
