Subject 7. Corporate Governance and Stakeholder Management Risks and Benefits

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.

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