- CFA Exams
- 2020 Level I
- Study Session 10. Corporate Finance (1)
- Reading 31. Introduction to Corporate Governance and Other ESG Considerations
- Subject 7. Corporate Governance and Stakeholder Management Risks and Benefits
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Subject 7. Corporate Governance and Stakeholder Management Risks and Benefits PDF Download
From a corporation's perspective, risks of poor governance include:
- weak control systems or inefficient monitoring tools;
- ineffective decision making;
- legal, regulatory, and reputational risks;
- default and bankruptcy risks.
Benefits of effective governance and stakeholder management include:
- better operational efficiency and control brought by effective monitoring tools and control mechanisms;
- better operating and financial performance;
- lower default risk and cost of debt.
Learning Outcome Statementsh. identify potential risks of poor corporate governance and stakeholder management and identify benefits from effective corporate governance and stakeholder management;
CFA® 2020 Level I Curriculum, 2020, Volume 4, Reading 31
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