NEED FOR REFORMS IS A NATURAL PHENOMENON

Abstract

The need for corporate governance comes from separation of powers between ownership and control in large corporations which are built on each other to protect investors` rights by reducing managerial discretion over business decisions. Business flourishment is a basis for countries` proper development in terms of capitalism providing that such prosperity is based on a rational legal system. Affluent nations who were able to form strong institutions to protect property rights and enforce contracts are far too ahead of developing countries that fail to set up such legal instruments to eliminate loopholes in their systems thus not being able to enjoy world market opportunities.