Satyam Computers scam will go down in history as a perfect example of a Corporate Governance fiasco. Such unfortunate happenings put a question mark on the corporate governance practices performed by the companies. It all the more stretches the need for good corporate governance to be practiced by all the countries across the world.

What is Corporate Governance?
Corporate Governance means the rules, regulations and the processes, on the basis of which businesses are regulated, operated and controlled. In other words, it is a promise made by the company to its stakeholders that the management would run the company on the basis of the rules that govern the company. All the activities shall be performed by the company as per the regulatory norms, and thus enabling them to achieve their goals as well as the stakeholder’s goal. By doing this, the company shall have proper goal congruence with their stakeholders.

Various ways in which Corporate Governance is practiced:

  • Running the business ethically
  • Complying with all the rules and regulations
  • Hiring Independent directors
  • Transparency in all the business Transactions
  • All the necessary disclosures are done
  • Proper equitable treatment to all the stakeholders
  • Keeping stakeholders interest in mind
     

Infosys-Practices good corporate governance
Infosys has got lot of awards for being the best Indian company in corporate governance. As per Infosys, Combined Code Principles of Good Governance and Code of Best Practice derived by the committee on their final report and from that of the Cadbury and Greenbury Report, enabled them to have a high degree of corporate governance.

Corporate governance-Rising importance in the recent years
In the past few years, corporate governance has gained lot of importance all thanks to the famous fiascos of ENRON and Satyam Computers. Not that, it was not considered important before, but the latest high profile scandals have actually showed a lapse in the corporate governance practices across the globe. The regulatory bodies have noticed that it’s not only the companies that have failed, but it has been a failure of systems as well.

All these debacles emphasize on the need for bringing on more stringent laws and mechanisms that might cover the existing loopholes in the system. Good corporate governance practiced by the company, will not only create a long lasting trust between the company and its stakeholders but will also improve the reputation of the company.  On a wider sense, companies practicing good corporate governance, will contribute to the nations overall welfare.