Effectivenness and role of corporate governance in protection of minoryity shareholder rights.

Abstract

Corporate Governance is about alignment of interest of managers with the shareholders, to ensure that the managers do not pursue their own interest. Studies have shown that the countries with stronger protection of minority shareholder rights have stronger equity market and after implication of CG principles the ratio of corporate scandals has drastically decreased as it helps restore investor’s confidence because it has lower risks and few unexpected events. In Pakistan Security and Exchange commission of Pakistan and Pakistan Institute of Corporate Governance are working in collaboration to promote the awareness of CG Two surveys have been conducted in this regard by the World Bank and International Finance Corporation in 2005 and 2006-007 respectively. Result of CG have proved to be fruitful for many countries and not just the corporate sector but banking and financial sector even the non government organization follow the principle of CG.