Corporate Governance in Sri Lanka

In: Business and Management

Submitted By gagana
Words 6667
Pages 27
Introduction
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management, and the board of directors. Other stakeholders include labor(employees), customers, creditors (e.g., banks, bond holders), suppliers, regulators, and the community at large. These are some definitions given under the Corporate governance;
The simple meaning of the Corporate governance is the relationship between corporate managers, directors and the providers of equity, people and institutions who save and invest their capital to earn a return. It ensures that the board of directors is accountable for the pursuit of corporate objectives and that the corporation itself conforms to the law and regulations.
- International Chamber of Commerce
"Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society “
"-(Sir Adrian Cadbury in 'Global Corporate Governance Forum', World Bank, 2000)

Company’s financial statement is very important for the external users especially investors to make a decision and understand the business. Figures in the financial statement may not be very helpful, therefore, most of this investors will rely more on the disclosures or notes provided in the financial statement. Basically, SLFRS promote corporate governance through this…...

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