In your own words discuss how corporate governance and business ethics overlap and interact with each...

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Accounting

In your own words discuss how corporate governance and businessethics overlap and interact with each other in terms of the day today requirements of a small company with three directors.

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corporate governance Corporate governance is the system of rules practices and processes by which a firm is directed and controlled Corporate governance essentially involves balancing the interests of a companys many stakeholders such as shareholders management customers suppliers financiers government and the community Many SMEs consider that corporate governance is only relevant to large companies However good governance presents major advantages for all companies especially when raising capital or selling the business The majority of companies in Australia are smalltomedium enterprises which often view corporate governance with scepticism Good governance in this context is not primarily concerned with compliance with formal rules and regulations Rather it is about establishing a framework of company processes and attitudes that add value to the business help build its reputation and ensure its longterm continuity and success Good corporate governance is particularly important to the shareholders of unlisted companies In most cases such shareholders have limited ability to sell their ownership stakes and are therefore committed to staying with the company for the medium to long term This increases their reliance on good governance Essential principles of corporate governance for See Answer

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