Let’s Analyze Activity 1. Corporate governance is a vital component in good governance. In this part, you are once again required to elaborate thoroughly your answer on the questions below: 1. Explain how corporate governance help an organization achieve its vision and mission Corporate governance ensures everyone in the organization follows appropriate and transparent decision-making processes and that the interest of the stakeholders are protected. It also helps build a good working environment therefore supporting stronger growth for the organization. It enables the interaction between the shareholder, board of director and company management in shaping the organization’s performance and the way it functions. 2. Explain agency concept in the context of corporate governance. Agency concept is where the owner or shareholders hire officials, managers and employees in order to achieve their desired goal. The owners give a certain amount of control and track over their company's operation to these workers whose sole purpose is devoted to their company's success. Owners will align their interests with the top workers interests by giving them high salaries, bonuses and other incentives. Though, agency theory says that there will always be some sort of conflict between a hired worker's personal interests and those of the owners. 3. Explain how Cadbury and Greenbury reports contributed to the improvement and application of corporate governance. It guaranteed that there should be a clear division of responsibility between the board and management to guarantee balance of power and authority. Hence, it provided a means to establish balance between the salaries of the directors and how their performance contributed to the company.