- CFA Exams
- 2025 Level I
- Topic 3. Corporate Issuers
- Learning Module 3. Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
- Subject 3. Corporate Governance Risks and Benefits
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Subject 3. Corporate Governance Risks and Benefits PDF Download
Weak corporate governance, unmanaged conflicts of interest, or inadequate stakeholder management can place firms at a competitive disadvantage. From a corporation's perspective, risks of poor governance include:
- weak control systems or inefficient monitoring tools;
- ineffective decision making;
- legal, regulatory, and reputational risks;
- default and bankruptcy risks.
Benefits of effective governance and stakeholder management include:
- better operational efficiency and control brought by effective monitoring tools and control mechanisms;
- better operating and financial performance;
- lower default risk and cost of debt.
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
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