Explain the need for corporate governance with special emphasis on developing nations
Answers
Corporate governance refers to the rules, practices and relations by which a company is controlled. In developing countries, corporate governance has become very important to improve the managing efficiency and integrity. Some principles of corporate governance are
- transparency in all transactions,
- fairness,
- following the laws strictly,
- accountability and
- responsibility to investors.
A company with good corporate governance attracts the foreign investors. It also increases the share price of the company. It helps prevent criminal liability of the company and fraudulent acts if executed properly, corporate governance will accelerate the nation’s growth and development.
Need for corporate Governance with special emphasis on developing Nations:
The Corporate sector needs to be governed well for the developing nation for them to stand beyond any phase to undergo any economic crisis at any point of time.
Explanation:
The economy of a developing country is the major aspect which monitors the development of a nation, and after agriculture, corporate sector is the second most contributing regime to the economy of the developing nation and thus needs to be governed. Proper governance may lead to corporate efficiency and develop integrity attracting investors which on large accelerates the development.