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Question 1

Corporate governance is a set of regulations, processes, and rules that direct and control a
company's behaviour. It is the framework that regulates interactions among shareholders,
executives, the Board of Directors, and other key stakeholders. Corporate governance
standards must be enforceable and enforced on a consistent basis. The Board of Directors
plays an important role in implementing corporate governance strategies. To have continuity
of strategic intent, it must communicate with the business's management. The development
and implementation of a coherent plan, followed by its successful implementation, are critical
to the progress of any organization. Shareholders are also key players in governance, and they
must ensure that the best directors are named to their Board. Strong corporate governance
fosters an honest culture, which leads to a high-performing and long-term business. Good

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governance signals to the public that an enterprise is professionally managed and that

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management's interests align with those of other stakeholders. As a result, it would provide

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companies with a competitive advantage. The beneficial effects that arise as uncertainties are

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regulated and operational processes are streamlined and compatible demonstrate the value of
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corporate governance. Good corporate governance can have many direct benefits to
organizations, such as the creation of a community, a positive identity, and financial
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sustainability.
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Good corporate governance can help to shape an organization's community into something
truly special and diverse. Consistently good governance as an input at all levels produces a
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community of competence as an output. The behaviour of the leadership determines the

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behaviour of the workers, and it becomes much easier to fit in with the given community in
such circumstances. Regulators are scrutinizing all aspects of a corporation's activities,
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including how seriously it takes governance. Regulators are aware that companies with poor
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environments are more likely to have bad-behaving executives or workers. A poor

organizational culture combined with poor employee behaviour creates the perfect storm for
overall poor results and future crises. Poor corporate culture will bring a company into a
downward spiral of financial decline, staff attrition, and potentially legal problems. In
contrast, studies have demonstrated that a constructive long-term organizational culture
increases competitiveness and produces positive long-term investment returns. Corporations
with a positive business culture boost their image and credibility. They also discover that their

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clients are extremely loyal. These challenges have a strong impact on the corporation's
overall strength and profitability.

Strong governance leads to good products, which leads to commercial growth. The reputation
of an organization would make or break it in the industry. It is very unlikely for an
organization to succeed or progress without a decent reputation. Corporate governance's
primary duty would be to improve and uphold corporate credibility. Without the assistance of
the internal organisation, it is difficult to retain a good reputation. Corporate credibility is
described as "the collective presentation of all participants' image, created over time and
based on programs of company identification, success, and expectations of its behaviour."
When people choose a company's goods and services to competing products that are
comparable in price and quality, we are talking about a positive reputation. A good reputation

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is a crucial condition of partners' support for a firm in competitive relationships, and it is a

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vital aspect of an organization's valuation on capital markets. Despite its intangibility,

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analysis suggests that prestige provides a long-term strategic edge.
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Financial stability is described as the capacity of the financial system to promote both the
effective distribution of economic capital, both spatially and particularly intertemporally, as
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well as the effectiveness of other economic processes (such as wealth accumulation,

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economic growth, and ultimately social prosperity). Assessing, pricing, delegating, and
managing financial risks; and maintaining the flexibility to carry out these key roles even
when impacted by external shocks or a build-up of imbalances, primarily by self-corrective
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mechanisms. Good governance reduces the likelihood of security, legal, performance, and
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warranty problems, all of which may be detrimental to a company and its stakeholders and/or
interested parties. Stakeholders and/or interested parties include customers, executives,
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managers, suppliers, owners, and even whole populations.

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Cooperate governance is particularly important to the success of an organization. Corporate

governance can make or break an organisation if not implemented properly. Once
implemented strategically and applied throughout the organization they would see many
benefits flowing into their business, short term, and long term. Such as a good reputation, a
great culture and financial stability, which can lead to a profitable organization for years to
come. Without corporate governance the organization can run into loss and dysfunctional.

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Question 2

Environmental, Social, and Governance (ESGs) are a set of criteria that investors use to
decide which organizations to invest in. A few mutual funds and brokerage firms are also
selling products that follow ESG guidelines. Environmental standards define how an agency
acts as an environmental steward. It is critical to consider cultural, socioeconomic, and
government concerns while supporting it (ESGs). When companies consider ESGs, the
corporation's image improves. Finally, the corporation's value and survival are influenced by
its good reputation. Environmental, social, and governance (ESG) topics are intertwined and
crucial in the discussion about the purpose of coexistence. Environmental, Social, and
Governance (ESG) issues are relevant in the discussion about the intent of businesses since a
strong ESG policy would obtain access to major business markets, create a more powerful

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corporate presence, and foster long-term economic growth that benefits corporations and

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investors.

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A solid ESG proposition enables businesses to enter new markets and invest in developed
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ones. When governing authorities have faith in corporate players, they are more likely to
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grant them entry, permits, and licenses that open new avenues for development. This makes
for higher revenues and businesses can quickly grow and/or enter new markets. For example,
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in a recent major public–private development project in Long Beach, California, for-profit

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corporations were chosen based on their previous success in sustainability. Superior ESG
execution has clearly paid dividends in mining as well. Consider gold, a mineral that,
everything things being equal, can produce the same rents for mining firms.
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Companies who understand the value of responding to changing socioeconomic and

environmental trends are best positioned to recognise business prospects and face competitive
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challenges. Proactive and integrated ESG strategies will increase a company's economic moat
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in comparison to other market participants. Starbucks discovered this when attempting to

increase their market share in China. Starbucks failed to gain traction in the market for years
after joining it. They discovered the solution when they were providing healthcare to the
parents of their workers. After that, revenue increased dramatically, and Starbucks now has
2,000 locations in one of the world's fastest expanding countries. Executives who take action
to change working rights, diversify their teams, contribute back to their neighbourhoods, and
advocate for environmentally friendly strategies help to reinforce the company's identity.

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While investors often fear that ESG investment will reduce returns, a 2015 study by Oxford
University and Arabesque Partners finds that it is in corporate managers' and investors' best
economic interests to incorporate sustainability factors into their decision-making processes.
Strong ESG consistency will assist an organization in developing a strategic edge, which can
then fuel outperformance. Coca-Cola, for example, successfully increased their ESG
efficiency and achieved superior results as a direct result of reducing the water strength of
their manufacturing process by 20% over the last decade. These findings illustrate the
significant effect that long-term product innovation has on a company's sales. As a result, by
incorporating ESG topics into their corporate sustainability processes, businesses will be able
to realize cost savings through creativity, resource management, and sales enhancements
through sustainable goods, which could lead to margin increases and higher profits.

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Finally, when it comes to fostering stakeholder capitalism, environmental, social, and

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governance (ESG) considerations are all critical. This is exactly why ESGs are important in
the debate on the purpose of corporations. Therefore, ESGs are critical in the controversy

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about the purpose of companies. ESGs are interconnected and they aim to generate value for
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workers by ensuring that their corporate social obligations are met. Furthermore, they assist
companies in establishing a triple bottom line that focuses not just on profitability but rather
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on people and the environment, which increases their relevance in the discussion about the
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intent of corporations.
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