The Emerging Market Context: Why Does It Matter?
Corporate governance is the “set of mechanisms used to manage the relationship among stakeholders that is used to determine and control the strategic direction and performance of organizations” (Lynall, Golden, and Hillman 2003). Corporate governance helps ensure that a firm’s strategic decisions are made effectively and in line with shareholders’ interests. It aligns owners’ and managers’ decisions. It is also a reflection of the firm’s values and beliefs. Efficient corporate governance mechanisms can be a competitive advantage for a firm.
Until recently, the need for corporate governance laid on the idea that when separation exists between firm ownership and its management, self-interested ...
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