CORPORATE GOVERNANCE SYSTEMS
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Corporate governance- corporate governance means, “the internal structure and rules of the board of directors, the creation of independent audit committees, rules for disclosure of information to shareholders and creditors, and control of the management. In other words, corporate governance is a term that refers broadly to the rules, processes, or laws by which businesses are operated, regulated, and controlled.
In recent years, corporate governance has received increased attention because of high-profile scandals involving abuse of corporate power and, in some cases, alleged criminal activity by corporate officers. An integral part of an effective corporate governance regime includes provisions for civil or criminal prosecution of individuals who conduct unethical or illegal acts in the name of the enterprise.



Importance of corporate governance in a company

The global and regional importance of Corporate Governance (“CG”) is clearly increasing; not only as a result of the financial turbulence in leading global economies, but also because of the increased focus on emerging markets. While good CG does attract investment, it should not be the only reason for implementing governance practices.
At Schema we believe that CG can only add value if the organization truly believes in the importance of accountability, transparency and effective communication.
“Corporate governance is the system by which companies are directed and controlled” Cadbury Code 1992
Corporate governance refers to the structures and processes for the direction and control of companies” IFC Definition.

Principles of corporate governance-
Rights and equitable treatment of shareholders: Organizations should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by effectively communicating information that is understandable and accessible and encouraging shareholders to participate in general meetings.



Corporate governance in three organization


Enron-Once the seventh largest company in America, Enron was formed in 1985 when Inter North acquired Houston Natural Gas. The company branched into many non-energy-related fields over the next several years, including such areas as Internet bandwidth, risk management, and weather derivatives (a type of weather insurance for seasonal businesses). Although their core business remained in the transmission and distribution of power, their phenomenal growth was occurring through their other interests. Fortune Magazine selected Enron as "America's most innovative company" for six straight years from 1996 to 2001. Then came the investigations into their complex network of off shore partnerships and accounting practices.


Lehman brothers-
The American regulatory model of corporate governance rests on the theory of self regulation as the most efficient means to achieve corporate self-control in the marketplace. However, that model fails to achieve regular compliance with baseline ethical and legal behaviours as evidenced by a century of repeated corporate debacles, the most recent being Lehman’s Brothers. Lehman’s Brothers Holdings Inc was a global financial services firm who provided services like investment banking, equity and fixed income sales, research and trading, investment management, private equity and private banking. It was the fourth largest investment bank in the United States.