Corporate Governance Case Study

Issues related to Corporate Governance

The corporation is a legal construct that came about as a way to accumulate and devote capital to, and share risk for large-scale entrepreneurial activities that would be difficult to fund otherwise. Shareholders take the brunt of the risk of their investments and received the leftover profit in the means of share value or dividends. This becomes a key metric for assessing whether the corporation is effective and efficient in its activities. (Holly J. Gregory, 2014)

The theories of corporate governance failures come in two theories in 2015. One is that there is too little active and objective board involvement. The second theory is that there is not enough accountability to shareholders. (Holly J. Gregory, 2014)

This gives a great importance to their role in society and the use of corporate power and expectation for the board to expand when given the oversight of risk management, compliance and social responsibility.

Boards should impress the importance of communication at every opportunity and is expected and encourage employees to come forward with any questions or concerns to lead the corporation to its success.

My experience with shareholders is sometimes the only priority are the shareholders and how it affects them and the rest of the company feels like they are not a part of it. This can sometimes create discontent in the work force from the top level down if they don’t feel like they may make a contribution to the company and that they are not considered an important part of the organization.

The key focus areas of board oversight is as follows as stated in (Holly J. Gregory, 2014)

• Corporate performance and strategic direction.

• CEO selection, compensation and succession.

• Internal controls, risk oversight and