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Introduction to Corporate Governance

In addition to the definitions of corporate governance mentioned in Unit 1 (p. 14) of the Study Text, you can find other definitions as follows: Corporate governance is one key element in improving economic efficiency and growth as well as enhancing investor confidence. Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders (public accountability). 

Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring. The presence of an effective corporate governance system, within an individual company and across an economy as a whole, helps to provide a degree of confidence that is necessary for the proper functioning of a market economy.

Noel Leung, DBA, MEd, MBA, MA, CPA(HK), CTA (HK), FCCA, FCA Professional accountant in Hong Kong and U.K. Working in the accounting field for more than 20 years, and corporate governance for 10 years Have published several research papers in the areas of corporate governance, financial accounting and higher education in Hong Kong, Canada and Taiwan, respectively