EFFECTIVE DRIVERS OF GOOD CORPORATE GOVERNANCE

Introduction :
The Institute of Company Secretaries of India defines corporate governance corporate governance is the application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective managemernt and distribution of wealth and discharge of social resposibility for sustianable development of all stakeholders In recent year, corporate governance has received incresed attention because of high profile and talked scandals i.e Enron in USA and Satyam in INDIA , involving abuse of corporate power and in some cases, alleged criminal activity by corporate officers.

Effective Drivers of Good Corporate Governance :

As per the research conducted by the department of trade and industry following are considered to be the effective drivers of good corporate governance : Board Independence Presence of large stock shareholders Shareholder activism Independence of the external auditors Competence of the audit committee Presence of internal control systems and support of whistle blowing. Long term performance related incentives Transparent and independent control of the remuneration committee An active markets for corporate control

Transparency and protection for shareholders and stakeholders during mergers and acquisitions

Shareholder involvement within corporate governance Employee participation in financial outcomes and collective voice in decision making.

CONCLUSION : The efficiency of corporate governance in a particular organization depends upon a combination of drivers. These drivers may substitute or complement each other in terms of their efforts on organizational outcomes including business strategy and performance.