Good governance is considered as one of the prime requirements for the
development. the country has to face a lot of challenges to implement good
governance in the nation. What are these challenges? What should be done to
minimize them? Write the answer in four and three points respectively.
Answers
Answer:Corporations of every size are key to the creation of wealth in modern societies. They are the main creators of economic value and employment. The way they are built and governed is crucial to a country's economic development. Good corporate governance means more efficient utilisation of resources, better access to capital, better and higher quality employment opportunities, and a better chance of developing in a sustained way efficient domestic or regional capital markets. Corporate governance is also important for the effectiveness of public institutions; better-governed companies are less likely to bribe regulators and judges.
Good corporate governance is a prerequisite for attracting patient equity capital that can contribute to domestic sustainable growth. A recent survey by management consultants McKinsey showed that investors are ready to pay a substantial premium for good corporate governance, especially in non-OECD economies. But governance does not only serve to attract foreign portfolio investors. Credible transparency, accountability and shareholder protection mechanisms are also important in attracting foreign direct investment, especially when joint ventures and other co-investment patterns are widely used.