CHAPTER ONE
INTRODUCTION
1.1. Background of the Study
The background of corporate governance dates back to the 19th century when state corporation laws enhanced the rights of corporate boards without unanimous consent of shareholders. They did it in exchange for statutory benefits such as appraisal rights in order to make corporate governance more efficient. Recently, corporate governance becomes a hot topic among a wide spectrum of people, government, industry operation, directors, investors, shareholders, academics and international organization to least but a few. Today’s world has seen that organization transparency, financial disclosure, independency, board size, board diversity and among others is the corner stone of good corporate governance practices. These variables are in the main agenda of most meetings and conferences worldwide including the World Bank, International Monetary Fund (IMF) and Organization of Economic Co-operation and Development (OECD).
Corporate governance is a number of process, policies, law, and institutions which impact on the way a company is controlled. An important theme of corporate government is the nature and extent of accountability of people in the business and mechanism that try to decrease the principles agent problems. It also include the relationship among the many stakeholders involved and the goals for which the corporation is governed; An essential condition for the survival of a company or more generally of an organization lies on the ability of its members to act reliably and efficiently to achieve the objectives of the organization in a very y small business. The substance co-ordination of behavior can be achieved in numerous ways. The manager can verify directly that the tasks are performed on the way he thinks which is suitable. The issue of corporate governance is thereby complete with completed issues connecting ideal institutional mechanism effective monitoring and balancing of competing interest of stakeholders (both internal and external) to the corporate governance structure (Williamson, 2002). Today, corporate governance is complex and mosaic consisting of law registration.
According to Sir Adrian Cadbury (2000), the corporate governance framework is there to encourage the efficient use of resources and equally for required accountability for the stewardship of those resources.
According to Strine (2010) defined corporate governance as putting in place the structures, process and mechanisms that insure that the firm is directed and managed in a way that enhances long-term shareholders value through accountability of managers, which will then enhance an organization performance.
OECD(2004), Defines corporate governance as the system by which business corporations are directed and controlled in favor of all the stakeholders. Currently, many country leaders all over the world has increased concern over corporate governance due to the increase of reported cases of frauds, inside trading agency conflict among other corporations.
In most recently, researchers worldwide have grown interest on corporate governance and its impact on organizational goals. The study investigates the impact of corporate governance on organizations in order to assess the significant of corporate governance in all organizations. This is because corporate governance is considered to have significant implications for the growth prospect of an economy. Good corporate governance practices are regarded as important in reducing risks for investors, attracting investment capital and improving the performance of organizations. Corporate governance is considered the general framework for supervisory procedures, and control on board of directors: in order to ensure procedures correctness related management control process, executive’s management, and correctness of measures to be objective. This ensures maintaining shareholders rights through strengthening of the organization financial performance. One of the main reasons that led to major companies collapse is department complicity, weak structures, weak control and follow-up units, and lack of disclosure and transparency required to enhance the entity of the organization and main stakeholders, which led to deficiencies in organizations financial performance.
Organizations cannot function well if sound corporate governance is not in place. As a result, every organization now has strong interest in ensuring that there is effective corporate governance at every organization in an increasing open environment. Corporate governance therefore refers to the processes and structures by which the business and affairs of institutions are directed and managed in order to improve long-term shareholders values by enhancing corporate performance and accountability while taking into account the interest of other shareholders.
1.2. Statement of the Problem.
In the past, so many organizations in Nigeria have been involved in unethical practices, which put the credibility of their corporate image at doubt. As such, communication company just like other network communication company have been constraints with issues arising from customers complaint of network quality are frequent cuts of fiber networks which links the cell sites. Poor governance practices led to the collapse of so many organizations in Nigeria. Hence, the need to study corporate governance and its impact on the achievement of organizational goals arose.
1.3. Objective of the Study.
Generally, this seeks to explore the relationship between internal and external corporate governance and its impact on organizational goal. However, the specific objectives are:
- To ascertain whether corporate governance affect the achievement of organizational goals.
- To determine empirically if there is any significant relationship between the level of corporate governance disclosure and its impact on the achievement of organizational goal.
- To help in bringing a cordial relationship between senior management and junior staff employers.
- To know if management helps to put corrective measure for employees.
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