What does enhanced transparency in corporate governance lead to?

Enhanced transparency in corporate governance leads to greater investor participation as it fosters a clearer understanding of a company's operations, financial health, and risk management practices. When a company provides transparent reports and disclosures, it builds trust with potential and existing investors. This trust can encourage more individuals and institutions to invest in the company, as they feel more confident in their understanding of how the company is managed and how its performance measures against industry standards and benchmarks.

Transparent practices can also lead to improved communication between the company and its stakeholders, allowing investors to make more informed decisions. This involvement can manifest in various forms, such as increased purchasing of shares, participation in shareholder meetings, and engagement in corporate governance activities. Ultimately, greater transparency can attract more capital, boost the company's reputation, and potentially enhance its overall market value.