Business / Good Corporate Governance
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Autor: anton 04 January 2011
Words: 646 | Pages: 3
THE PRINCIPLE OF GOOD CORPORATE GOVERNANCE
The main aim of a company must be located outside the company personally, that is located in the community because the company was the community's implement. Only had one legal definition for the aim of the company, which is to create the customer. The prepared customer paid the company that changed economic resources into the product that it was considered was valuable by the customer. Therefore then the company got the wealth. So as to be able to be said that in undertaking his activity, apart from with shareholders, the company also carried out the interaction with other sides that were related to the company that is stakeholder.
The implementation and contribution of stakeholder took an important part to raise the company in all aspect. Also then the purpose of the company is not just make a profit, but also to make the company valuable in every side of society. In order to create a good valuable in the eyes of shareholder and stakeholder the company must be able to apply the Good Corporate Governance principle.
Corporate governance was the process and the structure that were used to aim at and carry out the business and the company's affairs in order to increase business prosperity and accountability the company with the main aim of bringing about the value of shareholders in the long term permanently paid attention to the interests stakeholder that other.
According to Centre for European Policy Studies in Ð²Ð‚ÑšCorporate Governance in Europe: Report of a CEPS Working PartyÐ²Ð‚Ñœ defined corporate governance as all the system from the rights, the process, and the control that was formed inside and apart from the management comprehensively with the aim of protecting the interests stakeholder. The rights were the authority that was owned by stakeholder to influence the management. The process was the mechanism from the implementation of these rights. Whereas the control was the mechanism that enabled stakeholder to gets information concerning the activity of the company, for example about the report on the audit. Principles of the subject corporate governance that must be paid attention for the carrying out of the practice good corporate governance was:
The investor's Belief and market efficiency really depended on the achievement expression of the company accurately and in a right on time manner. In order to be valuable in the global money market, this information must clear, consistent, and could be compared as well as made use of the standard of accountancy that was accepted all over the world. The impact of the transparency was that interested sides could with the company count on the impact of the risk deal with the company.
Accountability was one of the solutions to complete the problem agency the problem between the Management and shareholders. Accountability was based on the internal system checks and balances that included the practice of the healthy audit. Accountability could be also reached through the effective supervision that was based on the balance of the authority between shareholders, the Commissioner and the Management. The practice of the healthy audit and the absolute independent was needed to support accountability of the company. This could be done in part by making the Audit Committee effective.
Fairness covered the clarity of shareholder's rights to protect the interests of shareholders, including the protection for minority shareholders from dishonesty like the practice insider that damaging or from the decision of the Management or shareholders the damaging majority the interests of shareholders on the whole.
The Company that responsible had responsibility of obeying the law and the current legislation including the provisions that arranged the problem of the environment, consumer protection, taxation, manpower, the ban on the monopoly and the practice of the competition that unhealthy, occupational health and safety, as well as the other regulation that arranged the life of the company in undertaking the activity of efforts.
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