What is one key benefit of good corporate governance?

Enhanced transparency is a key benefit of good corporate governance because it builds trust and credibility with stakeholders, including investors, employees, customers, and the community. Good corporate governance practices promote clear communication about the organization’s operations, financial performance, and decision-making processes. This transparency helps stakeholders make informed decisions and fosters a positive organizational reputation. It also encourages accountability and ethical behavior among management and the board, ultimately leading to better long-term success for the organization as a whole.

While increased regulatory compliance, higher short-term profits, and reduced operational costs are important aspects of business performance, they do not necessarily stem directly from good corporate governance practices in the same way that transparency does. Enhanced transparency serves as a foundation for strong governance and can lead to improved relationships and outcomes with various stakeholders.