Page 70 - Microsoft Word - 00 Prelims.docx

Chapter 3

Advantages and disadvantages of a

governance code

Advantages Disadvantages

Reduce fraud and corruption Reactionary rather than proactive

Poor governance = poor performance Impact is variable

Global investors pay a premium Restricts or dilutes directors’ powers

Decision factor for institutional Adds red tape and bureaucracy
investors

Reduces risk and potential losses to Harms competitiveness and cannot stop
shareholders fraud

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