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Concept of corporate governance Corporate governance is referred to as the system of rules, policies and practices that determines how the board of members manages and direct their overall operations of the organisation. the principles of corporate governance are mainly based on three critical aspects that being including transparency, accountability along with security (Aguilera, et al., 2018). Management while undertaking corporate governance practices keeps transparency with their shareholders and stakeholders so that their trust can be gained. Whereas, security as corporate governance enables the organisation in keeping the personal information of the customers and shareholders safe from being getting hacked. Besides, corporate governance as accountability makes it easier for employees and the team to perform their job roles with high efficiency and effectiveness (Bhagat & Bolton, 2019). the purpose of corporate governance also includes eliminating the issue of communication and promoting best industry practices that improve the overall performance and productivity growth of the business organisation. Impact of corporate governance on financial performance Corporate governance within the organisation not only benefits the firm in carrying out their activities efficiently but also corporate governance benefits the organisation in managing their financial performances. Corporate governance enables the business organisation with the opportunity to measure the actual performance of the organisation with that of standard performance of the organisation (Kieschnick & Moussawi, 2018). In terms of growing the financial performance of the organisation corporate governance also offers finance guarantee on return of their investment. Good corporate governance practices make it easier for the finance department of the organisation in eliminating the high cost of expenditure in procuring resources and managing inventories that brings scalability within the organisation. Corporate governance also helps in planning down financial activities that being including of taking control of the finances, making effective financial decisions along with taking investment decisions that grow the financial capabilities of the business organisation (Jia, et al., 2019). Corporate governance also undertakes financial performance measures that benefit the business establishment in maintaining the relationship with shareholders by paying the dividend. The relationship-building activity that corporate governance offers also seek towards improving the overall financial performances. Financial performance of the organisation is also being grown by calculating ROE, ROA and ROC that is being performed under corporate governance measures. Impact of corporate governance practices on firm performance Corporate governance practices have a significant role in terms of developing the firm performance that being including growing the performance of boards of directors. With good corporate governance practices, boards of directors undertake decisions that increase the overall financial performance of the organisation. Corporate governance practices also enable the firm to be accountable for monitoring the internal control system (Bhagat & Bolton, 2019). Corporate governance enables the organisation in identifying issues within the organisation such as workplace conflict and issues of taking control of the activities. Implementing best corporate governance practices enables the business organisation in eliminating the challenges and develop a better internal control system that seeks towards growing the overall performance and capabilities of the business organisation. The implementation of corporate governance practices within the organisation has also enabled the business in effectively monitoring and measuring their performances (Di Berardino, 2016). Strategic changes are also being implemented in terms of eliminating the risk so that better firm performance can be maintained. Monitoring of firm performance through corporate governance also enables the organisation in achieving competitive advantages over its competitors. Corporate governance in an entrepreneurial firm The role of corporate governance in entrepreneurial firm benefits in undermining activities that are necessary to culminate success within the enterprise. Corporate governance practices for the entrepreneurial firm includes identifying the gaps in their current business model and implement changes that help in eliminating the gap and restore better business activities. For an entrepreneurial business organisation, corporate business organisation plays a significant part as it helps in identifying the roles, authority along with timing in terms of performing the activities in an organised manner (Li, et al., 2020). Furthermore, evaluating the significance of corporate governance in the entrepreneurial firm it has also been noticed that it assist the entrepreneur in solving complex decisions along with building a strong management structure. Furthermore, undertaking best corporate governance practices also manages the entrepreneurial firm in attracting the attention of the investors within the firm. Formative business structure, clear job roles and responsibilities along with the proactive nature of the entrepreneurial firm help the investors in investing within the firm that contributes towards its future growth (Rasheed & Nisar, 2018). Furthermore, it has also been noticed that entrepreneurial firm also undertakes corporate governance as it helps in growing confidence among the entrepreneur in terms of taking risk and decision that help the entrepreneurial firm in growing and achieve success. Principles of corporate governance The key principles of corporate governance are based on the aspects of shareholder primacy and recognition. The shareholders are very important to the organisations as they provide stock fund for the operations and they are required to be recognised. Additionally, corporate governance also allows organisations to establish their equity as a major source of funding. The key principles of corporate governance allow the companies to display basic recognition to the shareholders as they are responsible for electing the board of directors for preserving the interest of the shareholders (Aguilera, et al., 2018). Corporate governance incorporates the theory of delivering maximum returns and profit to the investors and shareholders. The organisations are required to remain transparent as a principle of their corporate governance as the shareholders have the power and authority to reach out to organisational members who do not display any interest for the organisation but can benefit from the products and services. This encourages communication across the organisation and preserves transparency among the community that is directly or indirectly influenced by the operations of the organisation. This aspect of corporate governance across the organisations allows any individual whether being a part of the organisation or belonging to the external environment to review the actions of the business. This encourages the fostering of trust and accountability across an increased number of individuals connected with the business. Security is also an essential component of corporate governance as the shareholders and clients are required to be provided confidence by the company (Berg & Karlsen, 2016). This is in regards to protecting data security and integrity. During any event of lack of security or breach of personal information of the clients, the organisations happen to be at risk of losing the trust of the shareholders and other stakeholders in addition to diminishing the stock pricing. Some of the examples of bad corporate governance across organisations include the lack of cooperation with the auditors along with not disclosing accurate financial documents. Poor compensation packages for the executives also fail to provide optimum incentives for the officers working across the corporations and hence results in poor corporate governance (Bhagat & Bolton, 2019). The lack of well-defined structure across the board of directors also makes it problematic for the shareholders to terminate any improvements that are ineffective and hence results in poor corporate governance. The corporations need to adopt good corporate governance practices as any labs can result in government actions and litigation that could ruin the brand image and equity of the company. Corporate governance across the organisations are intertwined around the principles of business ethics for abiding by a basic code of conduct for the board of directors and executives. Theories of corporate governance Agency theory is an important concept in corporate governance that allows the shareholders to be the principles as the define the objective of the overall organisation. The management in this case is perceived as the agents in the company who are responsible for pursuing the objectives defined by the shareholders and owners. In this regard, the chief executive desire the long-term investment along with the shareholders whereas any mismatch among objectives of both the entities leads to agency problem (Jia, et al., 2019). Agency cost is incurred during any event of conflict due to cost caused by dissonance. In the case of the stewardship, the theory of corporate governance the board of directors played the role of service and advice. This theory of corporate governance focuses on the composition of the board and the distribution of power and wealth for the shareholders. Such kinds of businesses focus on making profits and distributing to the shareholders who are satisfied when the organisation achieves success. This kind of corporate governance enables the employees to work diligently and take ownership of their job for contributing to organisational profits (Kieschnick & Moussawi, 2018). The stakeholder theory of corporate governance revolves around the incorporation of accountability among the management of organisations towards the organisational stakeholders. In this kind of governance, the managers across businesses have leadership networks and relationships established for serving the different kinds of organisation of stakeholders like the supplies, business partners and employees. The managerial decision in such an organisation is focused on providing intrinsic value to the stakeholders.