Folder:
115 CFA
File:
115.050.01.07 Corporate Finance - Reading 31 - 7. Corporate Governance and Stakeholder Management Risks and Benefits

7. Corporate Governance and Stakeholder Management Risks and Benefits

h. identify potential risks of poor corporate governance and stakeholder management and identify benefits from effective corporate governance and stakeholder management;

From a corporation's perspective, what are the risks of poor governance?
- weak control systems or inefficient monitoring tools;
- ineffective decision making;
- legal, regulatory, and reputational risks;
- default and bankruptcy risks.

From a corporation's perspective, what are the benefits of effective governance and stakeholder management?
- 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.


Source:
  • CFA