Failures in Corporate Governance Essay Example | Topics and Well Written Essays - 750 words

Failures in Corporate Governance - Essay Example Theoretically, there is misguided notion that corporate governance is a simple and straightforward process. Personally, I think this notion proves futile. I am of the opinion that corporate governance is highly contextual, and tends to be dynamically unpredictable rather than being simply neat (Farber, 2013, p. 539). Inputs of corporate governance machines do not necessarily guarantee desirable outputs. As aforementioned, corporate governance is highly contextual, meaning that processes and practices used in the governance of distinct corporation change from one environmental context to another. Admittedly, the need to address interests of all stakeholders features as the leading objective of corporate governance. Theoretically, guardians of governance within any given corporation should ensure the sustainable effectiveness of these managerial concepts; responsiveness, accountability, legal responsibility, strategic vision, and equitable participation of all shareholders (Farber, 201 3, p. 544). In practical contexts, some of these governance concepts may conflict or overlap. Consequently, conflict and overlap of operation principles result in failures within corporate governance. In the recent past, failures in corporate governance have brought down several high-profile corporations across the world. Enron Inc. is an example of collapsed giant corporations, with its collapse attributed primarily to failures in corporate governance. Other high-profile corporations suffering from failed corporate governance include Wal-Mart and Cadbury.