Reference no: EM133533825

Assignment:

Corporate Governance is a structure or body that enhances and maintains the relationships between internal stakeholders (board of directors, managers) and external stakeholders (shareholders) (The Importance of Corporate Governance, 2022)

The strategies laid out under corporate governance ensure that managers' goals and interests align with those of the shareholders. Below are a few mechanisms/strategies of good corporate governance that align interests of the parties mentioned above:

• Transparency: Under corporate governance, it becomes crucial for managers to be transparent with all the information they share with the shareholders. The managers should also be mindful of sharing that information promptly and regularly ("The Importance of Corporate Governance," 2020).
• Effective risk management: The managers must carefully make decisions so that any risk can be mitigated and avoided. The managers must formulate effective strategies to manage risks and inform and discuss the same with the shareholders ("The Importance of Corporate Governance," 2020).
• Fair treatment: As per corporate governance mechanisms, all the company's shareholders should be traded fairly and given equal importance by the managers so that no shareholders feel left out or unheard (Chen, 2023).
• Accountability: The managers must be able to provide clear explanations to the shareholders about the decisions they took and the results generated from the decision. The decision-makers become accountable for the company's performance. These decisions must also be communicated to the shareholders to ensure that the managers are acting for the shareholder's best interest (Chen, 2023).

References

The Importance of Corporate Governance. (2020, June 4). SpriggHR.

Chen, J. (2023). Corporate Governance Definition: How It Works, Principles, and Examples. Investopedia.