CONTEMPORARY CORPORATE GOVERNANCE ISSUES: theories into practice

Running Head: Contemporary Corporate Governance Issues Insert Name Insert Course Title Insert Instructor`s Name Date In the contemporary world, the shareholders value in the company is highly appreciated as it is perceived to be of beneficial to the company as a whole. This is due to the fact that they possess indirect and direct influence to the operability of the company and the profit outlay and therefore the company focus on the dependency on the shareholders in order to realize their long run goals. Many companies ensure that shareholders existence is of key, if not ultimate, importance to the company (Anson, 2006). It culminates that their value is created when the investments returns of the company is less than the investment costs. Shareholders minimum return expectations is based on the investments they made which is equal to going return valued at low-risk investment such as U.S. treasury securities and inclusion of the risk premium associated with the company`s risk level. The company`s focus on the shareholders value should endeavor to stay abreast with shareholders interests. The managers reinstate their vision to the entrepreneurial strategy rather than focusing on its superiors. This will enhance them to divert from the constant dependency of their superiors and strive to meet the shareholder`s value and needs. This is instigated by Andrew Black et al. suggestion in In Search of Shareholder Value that managers` entrepreneurial perspective provide a wide and inherent way of meeting the shareholders value (Luo, 2007). Consequently, the managerial focus is on company`s key revenue-generating functions so as to meet the shareholders value and also in running the company efficiently. This in turn enables the company to be more of service or product leader and therefore the closer tie with the consumers. The managers of the company identify the primary and ultimate revenue-generating strategies and promote them. The company main focus is to distinguish the shareholders with long-term interest in the company`s operations and those with short-term interest. To meet this criteria the company endeavor to execute growth strategies that will have a benefit to both the two kinds of investors. This will not be achieved smoothly as the company will experience conflicts of interest on the two kinds of investors. Shareholders own a considerable power in the company`s decision making body. The Company well being needs to focus on the management of the shareholders in order to fulfill two conditions; first, meet their needs and provide them with information needed on the company`s plans and performances. Secondly, the company needs to maximize the shareholders profits in order to maintain existing and attract new shareholders. The provision of these needs to shareholders ensures that their relations are well cultivated and prevent any discretionary demands. The company`s development is directed to information system where the shareholders access the information they need periodically as it constitutes the basic rights of the shareholders (Luo, 2007). The Company`s financial reports need to provide comprehensive information on profits, assets, sales and liabilities...