Role of Corporate Governance in Organization

Ramazanali Royaee, Bahareh Banitalebi Dehkordi


Following the great financial infamy in big
companies, like Enron, World Com, Adelphi, Cisco and …,
one of the most issues noticed by researchers and suggested
from investors is Corporate Governance, addressing the
need for company management control, dividing
economical unit from its ownership and improving the
performance of the board of managers, auditors,
accounting system, internal control, and finally maintaining
investors and stakeholders’ rights. Using better managers
in companies results in improvement of their performance,
leading to stockholders rights too; consequently financial
yields will be increased and company control will be better
performed. Corporate Governance importance in the world
is at some extent that Standard & Poors institute has
introduced following multiple criteria to measure corporate
governance status: ownership structure, financial
stockholders relationships, structure and how- to- act of the
board of managers, and clearance and disclosure of the
information. Due to the issue importance, this article will
define the corporate governance and its conceptual
framework, types of existed theories, types of the corporate
governance, and comparing them with each others as well
as attempting to develop corporate governance.


Corporate Governance, agency theory, transactions cost theory, stockholders theory, organization and stewardship theory

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