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.