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*AAKASHAYA PATRA SEVEN STAR SMART EDUCATION SERIES PART – 37 :* 22.03.2020
Corporate Governance

Corporate governance is the system of rules, practices and processes by which a company is directed and controlled.Corporate governance essentially involves balancing the interests of company's stakeholders,
such as shareholders, management, customers, suppliers, financiers, government and community.Some of the key characteristics of good corporate governance include - independent leadership,transparency, accountability, consensus building, stakeholder relations, proper framework and policies in place, etc. You can come to know about company's corporate governance policies in detail by reading the report on corporate governance in the annual report of the company.Apart from that, important events like exit of the CFO or company secretary, resignation of independent directors or auditors and regulatory inspection or settlement are some obvious events that have to be scrutinized. Most of these events can indicate towards possible corporate governance issues in the company.When blue chip stocks with strong business fundamentals faces governance issues their stock price falls, but the tendency to recover losses in the aftermath is relatively high, after those issues are resolved. But same may not be true for small or mid cap companies.

So it is better to avoid investing in companies which have corporate governance issues, especially
if they are small or mid cap companies.

FOR MORE SUCH TYPE OF EDUCATION JOINT OUR ONLINE SERIES AND BATCHES AND BE A PRO TRADER CONTACT ON 7028 421 786.

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