Good Corporate Governance, Good Performance: Return Shareholders to the Driver's Seat, One Theory Says

Whether in the United States or Canada, good corporate governance involves board structure, compensation practices and shareholder rights. Post-Enron, good governance puts owners capitalism, where the company is run for the benefit of the owners and shareholders, back into the driver's seat and keeps it there. Good governance reduces risks, probably enhances returns and definitely promotes ownership capitalism. The corporate governance structure is a statement by a company of how it intends to behave, but investors also need to look at how it actually does behave - the potential and the performance. Three things to consider are: 1. board structure, 2. compensation practices, and 3. shareholder rights.