Corporate Governance and Value Creation

Abstract

Corporate governance is a complex issue, the focal point of which is the exercise of power. The power has limits, however, imposed by both legislation and contracts. Also, even if the overarching power belongs to the shareholders, residual power cannot be exercised to the detriment of the rights of the other stakeholders. Because the governance system and resulting structures have a major influence on the decision-making processes within a company, financial analysts must understand the governance mechanisms. Moreover, in the business world today, corporate governance is a factor in competitiveness that is as important as the quality of a company's human resources, its know-how, and its innovation capacity. Through in-depth literature review and contextual analysis the aim of this paper is to under the corporate governance perspective and also to review for understanding the corporate governance and value creation experience from India.