Category Financial Sector Assessment

Rationale for Good Corporate Governance?

A good corporate governance regime is central to the efficient use of capital. First, it pro­motes market confidence; helps to attract additional long-term capital, both domestic and foreign; and fosters market discipline through good disclosure and transparency. Second, good corporate governance helps to ensure that corporations take into account the inter­ests not only of a wide range of constituencies but also of the communities within which they operate and that their boards are accountable to the company and the shareholders.

Those actions, in turn, help to ensure that corporations operate for the benefit of society as a whole.

The experiences of economic transition and the financial crises in many develop­ing and emerging market economies have confirmed that good corporate governan...

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