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Corporate Governance has many definitions that academic and business professionals defined. However, in simple words, we can understand that governance is a set of processes, customs, policies and laws that control the corporation. Corporate governance is the most important key in business nowadays, mainly after financial crisis. The financial crisis pointed out many corporate governance failures.

According to the organization for economic co-operation and development (OECD), they reported that financial crisis can be connected to failures and weaknesses in corporate governance plans which didn’t help a security against uncontrolled risk that was their purpose. Moreover, the author suggests two keys. For example, he suggests providing a wider of the qualified board monitor and strong risk management to financial institutions. He mentioned OECD to re-examine the sufficiency of its corporate governance principles.

He came up with those hints because of the weaknesses in corporate. There are some weaknesses. For example, because of the poor corporate governance procedures, the risk management systems have failed. Secondly, boards had agreed a strategy but they didn’t keep under observation if this strategy implements or does not. As stated by International Monetary Fund report on the Kuwaiti financial system, on 2004, the report points out, “Corporate governance principles have not yet been fully addressed in Kuwait and serious gaps remain. However, according to the Zain Telecommunication Company in Kuwait, Zain believes that companies with expert and positive arrangement to corporate governance are stronger and have a huge record of performance. Moreover, it believes that effective corporate governance has a positive impact on its corporate. For example, a successful corporate governance will improve in long-term their stakeholders and primary serving the public interest.

In addition, Zain indicates some corporate governance practices, such as full financial discloser and cross-the board corporate transparency which can benefit from lower borrowing costs. This benefit was obvious in Zain’s case. For example, they have supported by their relatively debt-free and excellent cash-flow situation at that time. according to Zain site, they mentioned that financial institution provided for their company with US. $ 2. 4 billion bridging loan to enable their obtaining of cartel after that international financial institution have increased Zain with US $ 6 billion after two years.

Zain’s research shows that their investors will pay large premiums for companies with effective corporate governance (up to 30%), and those companies with successful corporate governance have higher price-to-book ratios. Moreover, there are some components of corporate governance. First, Zain has internal audit function. This function is to cover the entire group of Zain organization and is obtaining from outside countries components. The second component is the issuance financial results in a timely and clearly manner.

Zain stated that they are in the process of full adopting system of corporate governance based on the principles supported by OECD. The OECD principles of corporate governance became an international benchmark for policy makers, investors, corporations and other stakeholders. OECD provided specific guidance for legislative and regulator. There are some principles which are the following: Financial market stability Investment and economic growth protection and facilitate the shareholder’s right Recognition the right of stakeholders in creating wealth and jobs effectiveness monitoring of management by the board

In addition, Zain believes itself defined by an arrangement to excellence in providing world-class mobile, data services, offering employment and creating business opportunities. Moreover, Zain’s economic, social and cultural projects have a positive impact on the people. Zain gets corporate social responsibility very sincerely and it has an overconfident record of both adding to and joining in communities. Bibliography Pascal, Andre. “OECD Principles of Corporate Governance. ” Paris, France: 1961. Web. http://www. zain. com/muse/obj/lang. default/portal. view/content/About%20us/Zain%20Management/Corporate%20Governance

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