The impact of corporate governance on investment returns

[Johnson2468]

Corporate governance refers to the systems and processes through which companies are directed and controlled. It encompasses a range of practices, including the composition of the board of directors, the independence and expertise of directors, the transparency of financial reporting, and the alignment of executive compensation with shareholder interests. By lowering the possibility of fraud and poor management, encouraging long-term strategic planning, and boosting investor trust, good corporate governance can have a beneficial impact on investment returns. On the other hand, bad governance can result in lost shareholder value, legal liability, and reputational harm. Investors should therefore closely monitor the corporate governance policies of the businesses they invest in.