Corporate governance as a competitive necessity

Abstract

In the 21'' century, everyone is experiencing economic downturn throughout the world. As a result, everyone may prefer to place more emphasis on earning "quick money" rather than considering the ethical issue. The alarming case of Enron / Andersen made the United Stated re-think the corporate governance issue. The Sarbanes-Oxley Act of 2002 brought a new era of corporate governance. In Hong Kong, there were also some fraud incidents and the Carrian group fraud incident was the most famous case in Hong Kong in the late 80s. It is time for us to know more about corporate governance. From our in-depth interview and 2 surveys, it is found that corporate governance can be regarded as a competitive advantage for most companies, especially listed corporations. Corporate governance will definitely increase the efficiency, the decision quality, the risk management, the sources of investment, and the reputation of company. All of these factors increase the competitiveness of corporation. Also, it is found that public investor and tertiary students are more willing to work and invest in a company which possesses a good corporate governance system. These will give more competitive advantages to the company. All in all, there are still some barriers for developing and implementing corporate governance, such as lack of government support, lack of education in company and the value of the board. Although there are some barriers hindering the development of corporate governance, it is definite that corporate governance increase the competitiveness of corporation.