Abstract
Now that some background has been provided on the nature of internal governance mechanisms, we turn our attention to the governance forces operating outside a corporation. National governments are typically responsible for establishing, enforcing, and enhancing mechanisms that support external governance. From a financial markets perspective, a proper system permits efficient mobilization of capital, management of risks, identification of investment opportunities, and exchange of assets. All of these functions support and benefit governance. From a structural perspective, a proper system creates authorities that enforce rules and regulations, including a judicial process to handle legal and bankruptcy issues, and supervisory bodies to oversee local capital markets,1 external auditors, and credit rating agencies. These also benefit the governance process.
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© 2004 Erik Banks
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Banks, E. (2004). External Governance Mechanisms: Systemic Accountability. In: Corporate Governance. Finance and Capital Markets Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230508101_3
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DOI: https://doi.org/10.1057/9780230508101_3
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-51297-3
Online ISBN: 978-0-230-50810-1
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