Corporate Governance- Proposal Dissertation Example | Topics and Well Written Essays - 4000 words

Corporate Governance- Proposal - Dissertation Example The core objective of corporate governance is to prevent the negative impact of the unethical business practises on society. The past experience of the corporate governance failure has offered enough evidences for negative impact of society due to corporate failure. On the other hand, the theories of society and business relations explain that every business owes to society and hence, its major priority is to meet the social responsibilities by not practising any unethical business activities (Eweje, 2004, p.16). However, with the passage of time, the rate of corporate governance failure has increased significantly due to multiple corporate scandals. On the other hand, at present, the relationship between the business and society has become more important and it has been evolving constantly. Therefore, the responsibilities of business towards its society have also become more significant. In this respect, management of stakeholders and business ethics are two most necessary criterion s. Both of these two aspects are generally addressed in the code of the corporate governance that strives to meet the overall responsibilities of society (Carroll and Buchholtz, 2008, p.24). Considering the prevailing importance of corporate governance for the social and economic benefits, many developed countries and world organisations like OECD have developed certain common and desirable code in corporate governance. Other developing countries and emerging nations usually follow these codes of corporate by making certain adjustment based on their own culture, belief and business policies. For example, in Islamic countries (mainly in Middle East region), the entire financial market is based on Islamic religious law known as Sharia. However, the role of corporate governance is to control and guide the companies for practising and conducting the ethical business (Swanson and Fisher, 2011, p.275). 1.2. Saudi Regulations of Corporate Governance The growing importance of the capital ma rkets and other financial markets raise the necessity of a matured corporate governance system so that investors’ trust can be maintained. Hence, the Saudi Arabian Government strived develop a standard set of corporate governance codes in accordance to the compliance of Organization for Economic Cooperation and Development (OECD). â€Å"In February 2009, the World Bank (WB) released its Report on the Observance of Standards and Codes (ROSC) Country Assessment on Corporate Governance in Saudi Arabia† (eStandardsForum, 2010). Saudi Corporate Governance is based on six principle including â€Å"Ensuring the Basis for an Effective Corporate Governance†; â€Å"The Rights of Shareholders and Key Ownership Function†; â€Å"The Equitable Treatment of Shareholders†; â€Å"The Role of Stakeholders in Corporate Governance†; â€Å"Disclosure and Transparency†; and â€Å"The Responsibilities of the Board† (eStandardsForum, 2010). The Board of Capital Market Authority has framed specific laws for corporate governance based on the capital market authority. The laws for corporat