Ownership Based Approach to Corporate Governance

A company is the common platform of various stakeholders, such as customers, employees, investors, shareholders, Regulators etc. It is an legal entity and instrument that can attract huge capital for doing good business. Each transaction in a company should be fair and transparent to its stakeholders. Any company which has good Corporate Governance and an effective Board of Directors (the Board which includes an independent directors) attract investors, ensure investment, increases stakeholder wealth, and has a big role to play in country building and social responsibility. Hence, Independence of the Board is critical to ensure that the Board fulfills its role objectively and holds the management accountable to the company. You can see there are two critical organs in a Company viz., The Board of Directors and secondly The Management.There is a need to monitor the functioning of corporates vis-à-vis guarding the interests of investors, stakeholders, and creditors. Corporate performance is closely linked to the government's economic policies and the government has every right to monitor it. Good Corporate Governance is a move in right directionCorporate governance has succeeded in attracting a good deal of interest because of its apparent importance for the economic health of corporations and society in general. However, the concept of corporate governance is poorly defined because it potentially covers many distinct economic phenomena. The central problem of Corporate Governance is how the thousands of shareholders will best protect their interests, using as its main instrument a Board that sees its mission as being the protection of the company instead of, as happened so often in the past, defending the CEO. We should keep in mind that the modern corporate governance movement was born as a reaction to the very bad management to which some huge companies