The Topic Pillars of Corporate Governance is Relevant For UGC NET Commerce & Management as Follows:

Pillars of Corporate Governance

Introduction

Corporate governance is the system of rules, practices and processes by which a firm is directed and controlled. Corporate governance essentially involves balancing the interests of a company’s many stakeholders, such as shareholders, management, customers, suppliers, financiers, government and the community.

Pillars o

Pillars of Corporate Governance

  • Accountability
  • Transparency
  • Fairness
  • Role and Responsibility

Accountability

  • Organizations should recognize that they have legal, contractual, social, and market driven obligations to non-shareholder stakeholders, including
  • Employees
  • Investors
  • Creditors
  • Suppliers
  • Customers.
Accountability

Fairness

Organizations should respect the rights of shareholders and help shareholders to exercise those rights by encouraging them to participate in general meetings.The Company undertakes to protect shareholders’ rights and ensure equal treatment of shareholders. The Board of Directors shall give all shareholders the opportunity to obtain effective redress for violations of their rights.

Transparency

The Company shall provide timely, accurate disclosure of information about all material facts relating to its activities, including its financial situation, social and environmental indicators, performance, ownership structure and governance of the Company, as well as free access to such information for all stakeholders.

Transparency

Role and Responsibility of the Board

The Board recognizes the rights of all interested parties permitted by applicable law, and seeks to cooperate with such persons or companies for their own development and financial stability. The board needs relevant skills and understanding to review and challenge management performance. It also needs adequate size and appropriate levels of independence and commitment.

Practice Question on Pillars of Corporate Governance

“A company should provide all truthful information and facts about the company to their investors.”

Which pillar they have to follow?

Options-

A. Pillar of Accountability

B. Pillar of Transperancy

C. Pillar of Fairness

D. Pillar of Responsibility

Solution: B

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