WEEK 1- MGM4136 PREPARED BY PUAN HAMIMAH (TO BE USED AS GUIDELINES AS STUDENT PREPARING THEIR SPECIFIC TOPIC FOR THE ASSIGNMENT.

 1. Corporate governance is a field in economics that investigates how to secure efficient management of corporations by the use of incentive mechanisms, such as contracts, organizational designs and legislation. This is often limited to the question of improving financial performance, for example, how the corporate owners can secure that the corporate managers will deliver a competitive rate of return, Encycogov's definition.

 2. "Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance", OECD April OECD's definition is consistent with the one presented by Cadbury [1992, page 15].

 3"Corporate governance - which can be defined narrowly as the relationship of a company to its shareholders or, more broadly, as its relationship to society -….", from an article in Financial Times [1997].

 4. “Corporate governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment”, The Journal of Finance, Shleifer and Vishny [1997, page 737]

 "the process and structure used to direct and manage the business and affairs of the company towards enhancing business prosperity and corporate accountability with the ultimate objective of realizing long-term shareholder value whilst taking into account the interest of other stakeholders"

 The attainment of the company's objectives.  The alignment of corporate behavior to meet the expectations of shareholders.  Accountability and good stewardship, taking into consideration the interests of shareholders, stakeholders, corporate participants and society at large.

 AS A RESULT OF BAD CR, MULTIPLE CORPORATIONS/ORGANISATIONS HAVE BEEN SUBJECTED TO POOR PUBLIC IMAGE, COURT CHARGES, AND POOR FIRM PERFORMANCE.  EXAMPLES: Enron Corp and Perwaja

 Enron was named "America's Most Innovative Company" by Fortune for six consecutive years, from 1996 to It was on the Fortune's "100 Best Companies to Work for in America" list in 2000,Fortune  At the end of 2001, it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the "Enron scandal".accounting fraudEnron scandal

 Since incorporated, IN 1982, Perwaja had not only failed to gain any profit but was  involved in endless scandals and corruption.13 Within six years, it was knocking  on bankruptcy's door. Perwaja suffered losses of RM2.95 billion and at the same  time owed banks another RM7 billion. Perwaja was also facing colligations of  corruption and mismanagement in tender and contract awarding. For example,  Mah Sun Company and its related companies were awarded with RM967 billion  worth of contracts without any authorization from the board of directors.  Another RM103 billion worth of contract were also awarded to the same  company with no documents traced. Furthermore, doubtful trading transactions  and payments were carried out to non-existing company, i.e. Frilsham  Enterprise.  (FROM NORAZIZAH AND HALIMAH, 2007)

 Government and Companies have consistently promoting good corporate governance. One of the example is by introducing CR code of practice by the government of Malaysia.

 Effective law enforcement is essential to ensure the credibility of anti-corruption efforts.  Efforts by Governments throughout the world: by establishing and strengthening investigative agencies, independent prosecutors, specialised anti-corruption courts and anti-corruption agencies (ACAs) charged with the task of investigating and prosecuting corruption cases.

  Nor Azizah Zainal Abidin and Halimah (2007 ) CORPORATE GOVERNANCE IN MALAYSIA: THE EFFECT OF CORPORATE REFORMS AND STATE BUSINESS RELATION IN MALAYSIA, Asian Academy of Management Journal, Vol. 12, No. 1, 23–34, January 2007  Sanjai Bhagata and Brian Bolton (2008) Corporate governance and firm performance, Journal of Corporate Finance 14 (2008) 257–273