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Good Corporate Governance

Essay by   •  January 4, 2011  •  646 Words (3 Pages)  •  1,096 Views

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The main aim of a company must be located outside the company personally, that is located in the community because the company was the community's implement. Only had one legal definition for the aim of the company, which is to create the customer. The prepared customer paid the company that changed economic resources into the product that it was considered was valuable by the customer. Therefore then the company got the wealth. So as to be able to be said that in undertaking his activity, apart from with shareholders, the company also carried out the interaction with other sides that were related to the company that is stakeholder.

The implementation and contribution of stakeholder took an important part to raise the company in all aspect. Also then the purpose of the company is not just make a profit, but also to make the company valuable in every side of society. In order to create a good valuable in the eyes of shareholder and stakeholder the company must be able to apply the Good Corporate Governance principle.

Corporate governance was the process and the structure that were used to aim at and carry out the business and the company's affairs in order to increase business prosperity and accountability the company with the main aim of bringing about the value of shareholders in the long term permanently paid attention to the interests stakeholder that other.

According to Centre for European Policy Studies in “Corporate Governance in Europe: Report of a CEPS Working Party” defined corporate governance as all the system from the rights, the process, and the control that was formed inside and apart from the management comprehensively with the aim of protecting the interests stakeholder. The rights were the authority that was owned by stakeholder to influence the management. The process was the mechanism from the implementation of these rights. Whereas the control was the mechanism that enabled stakeholder to gets information concerning the activity of the company, for example about the report on the audit. Principles of the subject corporate governance that must be paid attention for the carrying out of the practice good corporate governance was:

• Transparency

The investor's Belief and market efficiency really depended on the achievement expression of the company accurately and in a right on time manner. In order to be valuable in the global money market, this information must clear, consistent, and could be compared as well as made use



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