The four models of corporate governance as outlined by Letza et al Essay

The tetrad models of merged governance as outlined by Letza et al - Essay ExampleLetza et als journal was based on an extensive survey and critical review article of the different theories and concepts that exist in corporate governance. Based on this comprehensive study, they identified four main(prenominal) approaches of perceiving corporate governance. This include 1. Principal/Agent or Finance Model. 2. The Mypoic Market Model 3. Abuse of decision maker Power Model and 4. Stakeholder Model Each of these models of corporate governance provide the basis for the perception of the splendor and significance of corporate governance in organisations. Although to each one of them carry different merits, none of them seem to be universally accepted. This newsprint examines the four models of corporate governance as outlined by Letza et al (2004). The paper will undertake an analysis of the key features of each of the model. The paper will comp ar and contrast the approaches for ea ch of the models and assess the future survivability of each of the concepts merged Governance Corporate governance refers to the ways that affaires are ran (Johnson, Scholes and Whittington, 2006). Corporate governance is about how the top level managers charged with stewardship roles in the organisation carry out the project of safeguarding assets and meeting the core vision and mission of the organisation. The developing of corporate governance has come with several issues and situations that let had important restores on the relationship between shareholders and strategic leaders of organisations. Major scandals that rocked the corporate world give care the Enron matter play a role in facilitating rules and principles that define the corporate governance terrain today (Clarke, 2005). pregnant components of businesses played various roles in shaping corporate governance rules and regulations. Short Termism V Sustainability Most businesses are faced with a major dilemma of whether they should acquire short term results or work for the development of the longer term interests of the business. In drawing the balance between shortermism and sustainability, most businesses are concerned with four key things (Aras and Gowther, 2009 p282). These include 1. Societal impact That is the impact of the business on the society. 2. Environmental impact The impact of the business on the natural environment. 3. Organisational culture The relationship between organisational and internal stakeholders like employees. 4. Finance The attainment of adequate returns commensurate with the risks taken. These four important factors play a major role in find the terrain and activities of the organisation. The major corporate collapses like Enron were attributed to blatant disregard for some key elements of these four components of businesses (Clarke, 2005). Thus, they all played roles in defining the creation of corporate governance rules and systems. Although there is stil l evidence of shortermism in corporate organisations, there is still some important roles that corporate governance standards and roles play in promoting sustainability in business (Eyatt, 2005). Risk Management One of the roles that corporate governance plays is that it helps in the creation of risk management systems to find that the board of directors monitor and control risks in organisations (Fraser and Harvey, 2007). Company business models should be explained and the board should be creditworthy for determining the