Corporate governance is not distinguished as bad or good. An organization does not have a good or bad administration. It has an effective and non-effective administration. Thus corporate governance helps to maintain an ethical culture among the employees and staves so that the firm can work in a systematic way. It does not allow the managers and other stakeholders to use unethical methods for the success of the company. They are always true to their customers and do not provide them with false guidelines. Corporate governance maintains a fraud and corruption free environment. The workers follow the integrity of the company and maintain its ethics and works with complete devotion.
Ethical and Efficient functioning
Corporate governance assists a firm in maintaining an ethical and efficient functioning. It is generally performed by the people with integrity. While efficiency is performed by those who are devoted and committed to duty. Both of the qualities are present in an employee. Corporate governance has rules and guidelines which an employee’s follows. However those rules and procedures are flexible and can change with different situations and times. They are always true to their customers and do not provide them with false guidelines. Corporate governance maintains a fraud and corruption free environment. The workers follow the integrity of the company and maintain its ethics and works with complete devotion. There are no such guidelines in private sectors and thus corporate governance assists a firm in maintaining an ethical and efficient functioning (Dignam & Lowry, 2006).
Benefits to society and stakeholders
The corporate governances ensure that the organization is ethical and efficient functioning so that the firm can achieve the mission maintains all the public policy along with the ethical standards and all the government laws. This would result in a systematic growth and development for the company while all the stakeholders would receive the benefits (Sun & William, 2009). Corporate governance has a great impact on the society and the organization itself. Through the CSR activities all the stake holders are benefited by the company equally. It maintains ethical standards by which the society is greatly affected. Corporate governance helps in providing the necessary benefits to all the workers of the company.