Corporate governance is the set of mechanisms used to manage the relationship among stakeholders and

Corporate governance is the set of mechanisms used to manage the relationship among stakeholders and

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Corporate governance is the set of mechanisms used to manage the relationship among stakeholders and to determine and control the strategic direction and performance of organizations. Recent emphasis on corporate governance stems mainly from the occasional failure of corporate governance mechanisms to adequately monitor and control top-level managers’ decisions. This situation results in changes in governance mechanisms in corporations throughout the world, especially with respect to efforts intended to improve the performance of boards of directors. (Corporate Governance Mechanisms, 2011) Three internal governance mechanisms and a single external one are used in the modern corporation. 1. ownership concentration, as represented by types of shareholders and their different incentives to monitor managers
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Unformatted text preview: 2. the board of directors 3. executive compensation We then consider the market for corporate control, an external corporate governance mechanism. Essentially, this market is a set of potential owners seeking to acquire undervalued firms and earn above-average returns on their investments by replacing ineffective top-level management teams. (Corporate Governance Mechanisms, 2011) Works Cited Corporate Governance Mechanisms. (2011, March 12). Retrieved March 11, 2011, from South University: http://myeclassonline.com/re/DotNextLaunch.asp? courseid=4777221&userid=4401962&sessionid=031dd9b42e&tabid=I1yBEGT+ArHF3KTEkcISvVA1X ocK1nSPJP1V0reMNKzCyR7zqBTqIXCKTlwEYy99&macid=ZNPlvKlHHjEi3BaNX5FOZI2eixpLzxdr exvHTIF6VUGMlyFEEip8rqMMpU5pVkwPUrjORT+nLuDVqj...
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