Supply Chain Essay

1995 Words Dec 15th, 2015 8 Pages
Mr. AADIIEETYA KUMAR JHA

Corporate Governance: Need & Significance in Nepalese Banking System
Meaning and General Concept
Corporate governance is a combination of corporate policies and best practices adopted by the corporate bodies to achieve its objectives in relation to their stakeholders. It is also the field of economics, which studies the many issues arising from the separation from ownership and control.
The fundamental objective of corporate governance reforms is to enhance transparency and transparency enhances accountability. It is widely recognized that transparency enhances trust among the major players within the governance framework. Various definitions and principles have been introduced to stabilize the corporate
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There may be a gap among major stakeholder like owners, depositors and management. Very limited people have a right to access in resources and decision. Due to the lack of transparency and adequate control mechanism, there may be the chance of vested interest and moral hazard problems. It is a universal fact that the higher degree of transparency contributes towards the maximizing shareholders value and ensuring the fairness to rest of the shareholders. Corporate governance also enhances performance

of the corporation by motivating manager to maximize returns on investment, raising operational efficiencies and ensuring long- term productive growth. Following key points help to emphasis the significance of corporate governance especially in the banking sector.
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Banking system stability is important for economic growth,
Good corporate governance (CG) is required in banks to achieve good CG in other firms.
Banks have wider stakeholders-government, regulators and most importantly depositors.
Promotes market confidence, helps to attract additional capital, and fosters market discipline through good disclosure and transparency.
5. Helps ensure that company takes into account the interest of not only of a group of people but also of the communities within which they operate. Those actions in turn help to ensure that FIs are operating for the

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