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Contemporary Corporate Governance Issues (Essay Sample)

To what extent does a company exist only for the benefit of its shareholders? Discuss the place of agency theory and its alternatives, including the problems of putting these theories into practice.” could you Please use \"Corporate Governance Accountability\" for Jill Solomon 3th Edition as one of the references. . Thank you, source..
Contemporary Corporate Governance Issues
The term corporate government has recent been used very much therefore prone more research on what it underlies the whole concept. There are different issues that have been of late been coined especially in trying to come up with the right definition that will suit its full mandate. Very many definitions have surfaced in pursuit to understand corporate governance depending on its faction especially to its stakeholder. Various definitions have come up especially encompassing finance and business. Others try to ensure that they make it understood in terms of formation of stock markets and joint stock companies. Therefore, due to the complexity that the whole issue has brought in the world of business, we will look at different definition as has been brought by different people.
The first definition according to Zingales as suggested in Leng 2009, says that corporate government is a complex set of constrains that shape the Ex-post bargaining of the quasi partner as generated by an organization. Shleifer and Vishny also provided another definition of the same saying that it is an arrangement of institution that the suppliers of the finance to the organization assures themselves of getting a good return of their investment. Cadbury Report gives a more comprehensive definition by saying that corporate governance is a system by which corporate and company are directed and control to achieve a predetermined goal. Nevertheless, the best definition so far that most the business related company and organization are using comes from the Economic Co-operation Development (OECD). They said that corporate governance is a set of relationships that occur between the company management, its shareholders, board members and other stakeholders. It ensures that it provides the structure through which the objectives will be set in the company and the way they will be met through thorough monitoring of the process to meet them. The definition emphasizes that the corporate governance should en sure that they offer incentives to the board and the company management to en sure that their morale is boosted in pursuit of achieving the company‘s objectives. They should ensure that monitor the effectively the set objectives of the company and encourage the stakeholders to use the available resources that are on their disposal to ensure that they reach to the postulated goals for the interest of the company and the shareholders ( Leng, 2009).
Therefore, the function of the corporate governance in the company is to ensure that the value of the company that is underlying the interest of the organization fraternity has been aligned to meet the required goals. They do this well by becoming the centre of the policy maker of the organization, encouraging investment by giving good environment for the same, and ensuring that the morale in the organization is i...
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