how would a lack of corporate governance affect the different stakeholders of a company?

Answer 1

A lack of corporate governance would jeopardize the welfare of the company, its employees, and the stakeholders. Corporate governances are rules that govern the business, dictating the direction and controls within the company to best optimize their reaching of the company goals/ mission. These are generally based on laws and best practices. To put it into perspective - look at the government. If there were no rules - what would 'judge' the government as doing something wrong? What power would the legislators or the judicial people have - better yet - what couldn't they have? When people went out and voted today - that is another thing covered in governances - how do you pick the leaders, how do you control so one or few people don't gain a demanding control. Other rules protect the shareholders - what trades/ sells must be told to the SEC, what protects a whistleblower, who signs the year end statements so to keep up with Sarbanes Oxley. It is definitely important.