How to Evaluate and Measure the Effectiveness of Corporate Governance Systems?

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Mohammad Hamdan, Russian Federation
There are numerous Corporate governance systems (CGS) in the world. They are complex and differ from country to country and from company to company. So how and when can we then say that a certain CGS is effective or that it isn't? In general, there are two different views about we can evaluate CGS and measure their effectiveness: 1. CGS evaluation based on the FINANCIAL PERFORMANCE of companies The supporters of this view of evaluating CGS adopt the fact that corporate governance mechanisms differ from one country to another, but the results are similar regardless of their structure, because all CGS aim to reduce "agency conflicts" in modern companies. Thereby reducing costs and increasing investor returns. According to them, the effectiveness of CGS can be measured by replacing underperforming managers with more efficient ones. Replacing weak executives indicates effective external monitoring of the market on the company's performance and gives all shareholders their rights, inc (...) Read more? Sign up for free

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  Meheresh, Management Consultant, India

No Causal Relation Between Governance and Firm Performance, Endogeneity

Please check the other perspective on the same top (...)

  Mohammad Hamdan, Russian Federation

Governance - Performance Relation

@: Thank you for your additional information. I re (...)

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