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.