PhD Finance - Effects of Corporate Governance Assignment

PhD Finance - Effects of Corporate Governance - Assignment Example 55), most of these techniques are implemented by organizations since they believe that they add value to the overall organization. According to, good corporate governance entails a much more soporific structure aimed at improving the process of decision making whilst creating appropriate avenues for shareholder’s engagement (American Law Institute, 1997, p. 272). Therefore, the concept of good corporate governance does not merely entail the creation of a governance structure or decision making. There are a number of good corporate governance techniques that an organization can adopt in a bid to increase the firm’s value. These techniques may include analyzing and disclosing the various risks facing the organization, choosing and compensating the management team, enabling the shareholders to vote on board elections and efficiently dealing with employee and management compensation issues (Tully, 2005, p. 18). Implementing these techniques will not only boost the employees’ morale to work at full efficiency but also enable the investors to be optimistic in terms of the investment returns. Whereas the practices of good corporate governance may vary from one organization to another, there is developing agreement on what the various ideal practices of good corporate governance are. The Organization for Economic Co-operation and Development (OECD), has come up with an ideal good corporate governance model that can be adopted by organizations (Goldin & Reinert, 2012, p. 261). However, apart from this model, many organizations have developed good corporate governance models which can be adopted by other companies thereby enabling them to maximize their firm’s value. Therefore, the models of good corporate governance are significant in the general performance of the organization since they create a highway of value maximization. American Law