Presented by:-
Introduction to
Corporate Governance
• Corporate governance means rules,
practices, and processes used to control a
company.
• Good governance promotes fairness,
transparency, and accountability.
•Poor governance can lead to fraud,
mismanagement, and financial losses.
Why Governance Matters
• Protects shareholders' interests.
• Ensures legal compliance.
• Promotes sustainability and ethical practices.
• Reduces financial risks and corruption.
Common Failures in Corporate Governance
Lack of Weak Board Unethical Business Short-Term
Transparency Oversight Practices Profit Focus
The Board of Directors does Companies prioritize short-
Companies fail to disclose Corruption, bribery, and
not properly supervise term profits over long-
important financial and non- fraudulent activities occur.
management. term sustainability.
financial information. Violations of labor laws, Cutting costs by reducing
Decisions are taken without
Investors, employees, and considering long-term environmental laws, and environmental or social
the public cannot make sustainability. human rights. responsibility efforts.
informed decisions. Example: A company investing Example: Companies using Example: A company
Example: A company hiding heavily in polluting industries child labor to reduce costs. choosing cheap but
environmental damage without concern for climate harmful plastic packaging
caused by its operations. change. instead of eco-friendly.
Company:
Satyam Computer Services
Issue:
Falsified financial reports.
Case Study:
Satyam Impact:
Loss of investor trust, financial
Scandal losses
Sustainability Effect:
Damaged corporate
credibility, job losses
Company:
Kingfisher Airlines
Issue:
Debt accumulation and poor
Case Study: management.
Kingfisher Impact:
Bankruptcy, unpaid debts
Airlines
Sustainability Effect:
Job losses, banking sector
damage.
Company:
Punjab and Maharashtra Cooperative Bank.
Issue:
Fake loan accounts, financial
Case Study: mismanagement.
PMC Bank Impact:
Bank collapse, loss of public money
Crisis
Sustainability Effect:
Reduced trust in cooperative
banks.
Impact on Environment
• Companies may cut corners on
environmental rules.
• Increased pollution and resource
exploitation.
• Weak governance leads to poor
sustainability efforts.
Impact on Society
• Job losses due to company
failures.
• Employees and small investors
suffer the most.
• Reduced corporate social
responsibility (CSR) activities.
Impact on Economy
• Financial instability and market
crashes.
• Loss of investor confidence.
• Damaged financial institutions and
weaker economy.
How to Improve Corporate Governance?
Increase Transparency 📢
Stronger Board Oversight 👥
Strict Compliance with Laws ⚖️
Focus on Sustainability 🌿
• Strong governance promotes sustainability and
growth.
• Governance failures harm trust, society, and
the environment.
• Companies must adopt ethical and transparent
practices.
