Corporate Governance Practices and their Impact on Attracting Investment and Capital
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Abstract
Modern businesses can't function without good corporate governance, which establishes ground rules for interactions among shareholders, managers, and executives. The capacity of a corporation to attract investment and capital is examined in light of the large body of research on corporate governance practises. Corporate governance procedures that work have been shown time and time again to increase a company's chances of attracting investment and financing. Investor trust is bolstered by a company's commitment to good governance practises including openness, accountability, and ethics. Companies with these characteristics tend to have better financial results, a lower cost of capital, and higher market values. Further bolstering the connection between governance and investment attractiveness is the fact that institutional investors, who play a crucial role in capital markets, are attracted to enterprises with solid governance. In addition to the monetary gains, a firm may reap other advantages from good corporate governance, such as lower agency costs and more resilience in the face of adversity. As a result, this is attractive to conservative investors. In addition, being compliant with established governance norms opens the door to international investment.