Corporate Governance and its History

Corporate Governance clears in few words “Corporate Governance is concerned with governing the corporate entities”. And also explain what are corporate entities. The corporate entities are the companies. The companies concerned with corporate governance are only the public limited companies not the private limited companies.

Now a days corporate governance has a lot of importance. The history of corporate governance is not very old. Last fifty years the corporate governance started the debate. The mid of 1970’s the corporate governance has been lot of discussed in both developed and developing countries or economies. In corporate governance the board has a lot of importance. Corporate governance force to a bold board in a company. The bold board has very much clear and reform the corporate governance what have been drive, for example in corporate ownership the desires of shareholders to use their rights and the most important to maximize the value of shares and therefore wealth.

Almost in 1990’s the corporate governance issue received about the wave of CEO dismissals (for example. Honeywell, Kodak, IBM) by their board. In 1992 the Cadbury report was published in UK. The report is about the committee on the financial aspect of corporate governance. In this report also include code of practice which is adopted by listed companies.

In 1995 the Myners report was published, in which give a lot of recommendations on the relationship to the both between the company management and institutional investors. In 1995 another report also came the name is Greenbury report that report deal with directors remuneration. After that the UK take a step in 1998 and issued a combined code of corporate governance. 

The all earlier issues or report are put in one set. These combined code of conduct applied to all UK listed companies. This combined code of corporate governance was revised in 2003. In 1997 when exit of foreign capital after property assets collapsed due to this the financial crisis affected the economies of East Asian countries like Thailand, Indonesia, South Korea, Malaysia and Philippines. These counties weakens his economies due lack of corporate governance mechanism.