Corporate Governance Review of Satyam Computer Services

ASX’s Corporate Governance Principle is one of the main sources of regulatory and best practice guidance on corporate governance topic; its approaches are considered to build a series of standard basis to administrate corporate behavior via modernising companies’ corporate governance in order to face both Australian and international market competitions. There have been 3 editions of corporate governance principles and recommendations, modified in

Corporate governance defined as the system of rules, practices and processes by which a company is directed and controlled. Balancing the interests of the stakeholders is essential involves in a company, which include its shareholders, management, customers, suppliers, financiers, government and community. There are five major elements of corporate governance, which are, board commitment, good board practices, functional and effective control environment, transparent disclosure, and well defined shareholder rights. To prevent corporate scandals, fraud and the criminal liability of the organization, good executed corporate governance is important and must apply and respect in the organization. There have a relationship between corporate governance and internal control, for example, the more in corporate governance, the more of internal control in the organization and the less of fraud occur. One of the tasks and goals of the corporate governance is to ensure there have adequate internal control within organization to protect the organization from any conflicts for the benefits of

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

Phenomenal growth of interest in corporate governance has emerged in recent years. The body of literature on the subject has grown markedly in response to successive waves of large corporate failures. Furthermore, there have been numerous attempts to define what constitutes ‘good corporate governance’ and to provide guidelines in order to enhance the quality of corporate governance.

In my review of A Primer on Corporate Governance by Cornelis A. de Kluyver I intend to examine, evaluate, and break down his key points. The book provides a general view on how corporations govern themselves, and the internal and external forces that effect and constrain them. The biggest external force is of course the US Government and the variety of laws and regulations imposed upon corporations. Internally, they are managed by the CEO and board of directors along with a set group of committees and corporate guidelines.

CN Rail has many set guidelines to ensure the corporation makes a positive impact on market conditions to benefit shareholders, its employees and other market participants. Outlined in CN Rail’s corporate governance manual, CN Rail has a strict set of

Corporate governance in a particular firm is inevitable for its administration, policy making and overall health. In other words, ‘Corporate governance affects the development and functioning of capital markets and exerts a strong influence on resource allocation[1].’ Not only does it conduct the present running of a firm but it also has a futuristic outlook and a good corporate governance system encourages innovations in the firm[2].

Companies should be controlled and directed in accordance with a system of good corporate governance and ethical business principles. It is through creating this corporate governance framework that a company can ensure effective business practices and corporate success.

The essential mechanism of the legal framework which governs the performance and functioning of listed companies in any country is the laws and regulations determining the quantity and quality of corporate disclosures. The core of governance is transparency, disclosure, accountability and integrity.

Regarding to the OECD, corporate governance tries to balance the interests of companies’ stakeholders, as well as supporting the access to capital for long term investment (OECD, 2015).

Good “corporate governance" is synonymous with “good business management”, that reinforcing surveillance systems, management and administration of a company, making them efficient, effective, honest, transparent and democratic. A company with high quality management will have access to financing (public or private) in better conditions and terms. Make appropriate business decisions to reach a higher level of accounting transparency, more efficiently manage business problems, and gives people, who are not involved in decision making, guaranteed that their interests are well protected. But the most important, perhaps, it is a good implementation of "corporate governance" will be translate into a company more ordered, correctly planning of their strategies and objectives, in addition to strength, liquidity and highly competitive.

Good corporate governance encourages shareholder confidence, which is important to the ability of individuals listed on the ASX to compete for capital. Below governance practices a listed entity chooses to adopt is basically a matter for its board of directors, the body charged with the lawful responsibility for handling its business with due care and assiduousness and therefore for ensuring that it has suitable governance preparations in place. (ASX, 2014)

The OECD Principles of Corporate Governance states that: "Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are

Corporate governance is the rules and systems, based on which a company is run. These systems are put in place to ensure that a company always runs in the best interest of its stakeholders such as shareholders, management and customers. These rules prevent managers in an organization from participating in a self-interested manner that could be damaging to the company and its stakeholders.

Corporate Governance is the relationship between the shareholders, directors, and management of a company, as defined by the corporate character, bylaws, formal policies and rule laws. The corporate governance system was designed to help oversee the decisions and best interest of the shareholders. The system should works accordingly: The shareholders elect directors, who in turn hire management to make the daily executive decisions on the owner’s behalf. The company’s board of director’s position is to oversee management and ensure that the shareholders interest is being served. Corporate governance focus is with promoting enterprise, to improve efficiency, and to address disputes of interest which can force upon