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Response to the following with 250 words APA style
LSE Model and Corporate Governance
Hopkin (2018) clarifies that corporate governance aims to improve organizational accountability, performance, responsibility, and ethical behavior. Corporate governance should help executives and employees to enhance transparency. Generally, corporate governance covers a broad range of organizational aspects, including risk management. The London Stock Exchange (LSE) model helps to improve corporate governance by focusing on the effective management of supervisory activities (Hopkin, 2018). In short, executives and organizational boards should coordinate activities to enhance corporate governance. The first column of the LSE framework focuses on membership, accountability, delegation, and remuneration. Thus, corporate governance is concerned with management responsibilities, as illustrated by the LSE model. Importantly, the LSE model outlines that Corporate Social Responsibility (CSR), risk management, audit, and disclosure are critical in meeting the expectations of various stakeholders (Hopkin, 2018). This model, therefore, supports corporate governance because it encourages cooperation between organizations and different stakeholders.
I believe that the LSE framework will work for all organizations. Aggarwal (2013) clarifies that corporate governance is a moral duty of every company. Besides demonstrating ethical conduct, it also promotes compliance with existing laws. The LSE model, for instance, reveals that there is a connection between financial performance and organizational governance. Notable corporate scandals such as Enron, Satyam, and WorldCom illustrate the need to implement the LSE model in all organizations. Various components of the LSE framework, such as accountability, CSR, and audit help to prevent unethical business practices. In other words, ethical conduct often creates and promotes organizational value (Aggarwal, 2013). Overall, good governance has a positive impact on a firm’s financial status. Organizations should implement the LSE framework to improve their governance structure. Finally, corporate governance supports some of the indicators of proper organizational management, such as ethics, reporting, transparency, and stakeholder engagement.
Aggarwal, P. (2013). Impact of corporate governance on corporate financial performance. IOSR Journal of Business and Management, 13(3), 1-5.
Hopkin, P. (2018). Fundamentals of risk management: Understanding, evaluating, and implementing effective risk management. Kogan Page Limited: London, England.