Contents

• Introduction
• Unjustified compensation
• Silent Yes men in the board and in the management
• Effect of bad people in the organization
• Examples of bad corporate governance
• Role of directors in corporate governance
• Conclusion
• Referencing

Description

This essay wants to evaluate some of the negative aspects of corporate governance. Of late, the role of corporate governance is attaining importance in every nation as it has been found that many directors are sitting idle on the board and do not protest to any wrong doing of other directors . Secondly, the essay had highlighted the fact that the biggest complain against corporate governance is unjustified compensation to the directors and also to the people of higher management. Thirdly, the essay wants to focus on the fact that these are considered as toxic elements within the organization and they really have a negative effect on the good people of the organization. Corporate governance can be defined as the ways by which a company is expected to safeguard the interests of the financiers which include investors, lenders and creditors. With the help of these framework of rules, the board of directors must ensure that there is accountability, fairness and transparency of the company with all its stakeholders Apart from investors, it also includes customers, management, employees and the government. Stillman (2008) has expressed in her article that for the past few years, it has been observed that much discussion is going on the role of corporate governance. This is because the economies can work well if the companies can run efficiently with transparency. Riack (2004) has expressed that if the companies cannot follow the path of good corporate governance, then there will be loss in jobs and investment as many people including the shareholders, employees and the creditors may get affected financially in the process.