Corporate Governance and Accountability Essay Example | Topics and Well Written Essays - 3000 words

Corporate Governance and Accountability - Essay ExampleHence, grievous governing is called for and indeed, demanded from the bodilys. This part of the paper looks at the dimensions on which corporate governance can be examine by undertaking a literature review of the readings that receive been assigned in different weeks of the course. The tension in this part is on a multidimensional and multi perspective look at some of the determinants of corporate governance.The aspect of administrator or senior management compensation and its effect on corporate governance is one of the frequently cited determinants (Forbes & Watson, 1993, 335). In view of the ongoing global economic crisis that was caused partly due to the profuse risk taking of bankers and the role played by incentives (flawed, in hindsight) in causing such amoral behaviour. give the gap between executive compensation and the compensation of the lowest paid worker in numerous corporations (to take an extreme case, th e ratio is said to be 3001), it is indeed the case that the system of incentives and executive compensation needs to be relooked at (Main et al, 1996, 1638). To take the examples of banks that failed like Lehmann Brothers and the very recent case of MF Global, where the structure of executive compensation and the misaligned incentives directly led to their downfall, it is apparent that the role played by executive compensation needs to be addressed as quickly as possible. In fact, even machine majors and other companies in sectors that were traditionally more egalitarian have fallen prey to the unsoundness of excessive compensation for the top management (Conyon & Leech, 1994, 238). Added to this is the fact of additional benefits in terms of bonuses, privileges and other perks that have resulted in the compensation system being skewed further to the advantage of the senior management and wind to severe issues of governance and behaviour (Conyon & Peck, 1998, 153).Board directors in firms are