Factors Affecting the Implementation of Good Corporate Governance

kingcore09 (45)in #business • 6 years ago

The consistent implementation of corporate governance is applied to every business activity of the company and at every level of the organization is essential for professional and ethical enterprise management. There are several factors that support and influence the implementation of corporate governance. But what are the factors?

Ownership

factors possession of a company is a factor of the most significant that can affect the application of corporate governance. because of the owner is parties have the authority to determine the direction of the company then implemented by management company.

based on its share ownership, the company can undifferentiated be a state-owned enterprises (state), which is a company that 50% more ownership is owned by the Central government, owned enterprises area 50% more ownership is owned by the provincial government and private company 50% more ownership is owned by the individual or non individuals like other companies (non-government).

broadly speaking, the form of the application of corporate governance in the state and enterprises look more rigid, because of supervised directly by the government and also have the characteristics of cultural impressed more static than a private company more dynamic. in addition, we also commonly hear the term family company. where its share ownership owned by certain family, including children company structure management company filled by members of the family. although family company okay, but inclination family company has agency problem and conflict of interest is very high on the company the family.

line of business and business environment

line of business from a company and business environment around the company also affect how governance applied by a company. on the industries have a tendency to highly regulated as industry banking and financial institutions as well as the healthcare industry and pharmaceutical of course differ implementation governance company when compared with the fashion industry or creative industries.

in addition, the business environment company also helped affect the application of governance a company. on the environment that has a business ethics good, of course will drive the application of governance of a company to the direction of the implementation of which is good.

legal form

legal form of a business activities will also affect how the application of governance company. company with legal form limited liability company would differ implementation of corporate governance when compared with the company of Commerce, or company area, or even with a resume.

share of public ownership

share of public ownership in stock ownership, of course will affect the implementation of corporate governance. as a company that ownership is owned by communities indicates that the company is a company that open and registered in stock Exchange. public company will be encouraged to apply the practice of corporate governance as well as possible, in order to protect the interests of shareholders individual.

a number of these factors are not alacrity directly to make the company automatic implement corporate governance better than the other companies. factors above more to factor nature of corporate governance.