Mgmt 311 - Corporate Governance

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MGMT 311

Journal Entry Week 6

10/29/17

Corporate Governance

        Corporate governance describes the practices and methods of which a company

operates its business/duties and how those practices work to meet financial, strategic and

operational goals. Corporate governance practices benefit all companies, regardless of whether

they are private or public, large or small, and established or beginning. There is not a uniform

guideline to go by, so each company governs their practices that is best suitable for the

respective company. Corporate governance is hard to measure in terms of effectiveness;

however, all companies compete in a world where good governance practices play a key role in

the success of that business. In specific, corporate governance helps meet goals of a business,

such as meeting shareholder expectations, raising capital and even preparing for new stages of

growth or acquisitions.

One of the components to help ensure a company is behaving morally correct is having

a diverse, qualified board of directors who can evaluate performance fairly. The board should

consist of individuals who value ethics and integrity highly. This is important because ethical

behavior begins from the top and continues down the ladder. If poor ethical behavior is

displayed among leaders, you can already guess how employees will view that and how soon

they will begin to display the same behavior. Board members should be independent from

management and should avoid any relationship that could potentially interfere with fair

decision making.

It is also important to emphasize integrity and ethical decision making. Leaders and