Principles and models of corporate governance Essay

Principles and models of corporate governance - Essay Example It is essential for each and every company to comply to this principles and models of corporate governance to establish the roles of management and the board and with the balanced skill, experience and independence on the board. The present paper makes an attempt critically assess the criteria in terms of strengths and weaknesses. Under Principle No 2 of Corporate Governance, 2.1 put forth certain criteria that would assess the capability, skills and experience of the company. Under Principle 2.1 which assesses the functioning of the board, the points excluding 2.1.9 can be regarded as the strengths of the guidebook of corporate governance which is the deciding factor for the corporate governance certificate. All the points under principle 2.1 ask about the boards’ performance, skills, capabilities, roles of the board according to the position of the board members, and other key performance areas. Principle 2.1.9 is not regarded as the weakness but can be considered as the more strongest assessment criteria than the other, as it can expose the weaknesses of the board of directors of the company asking whether they follow the company laws, regulations and also giving the boards the opportunity to mention whether or not they are voluntary capable of achieving high status in corporate governance. Principle No. 2.2 assesses the companies’ role towards the shareholders and their duties. The principles laid down in the guidebook are good enough to assess the role and responsibility of board towards their stakeholders. The principle critically assesses whether the company communicates the information with their shareholder, does it conducts annual general meeting, involvement in election of board of directors, transparency in financial matters, etc. The strengths of the principle 2.2 the sub principle 2.2.2 which evaluates the importance given to the shareholders by the company board members in respect of exercising