Democracy needs a change in the future of corporate governance from within because corporate governance should go much deeper more than laws and regulations (Branston, Cowling & Sugden, 2006). Moreover, the art of growing channels of communication is important since it fosters a respectful relationship. Therefore, it is important to nurture the civic society to allow people to develop and penetrate the governing processes that may impinge the social lives. Similarly, most people need to be facilitated through appropriate informal and formal education and learning that is based on intelligence of every individual in the society. Consequently, this will enable them to realize some situations that unrestricted citizens have the capability to provide a sound thinking concerning the process of governance. Therefore, individuals will participate in democratic institutions to the extent of their choices. Due to the future change of democracy in corporate governance, the citizens will demand the prevailing of good governance because they play important roles in ensuring that any economy is controlled according to the interest of the public.
The purpose of the governing system is to provide regulation on the exercise of the authority through setting up of incentive schemes and other commitment mechanisms (Gunay, 2008). Since the system of governance is part of the agency relationship, incentives should be provided to politicians so that they can seek social welfare. When the government offer protection to public goods and enforces contracts, it will achieve credible commitment among the agents. Secondly, through the imposition of taxes, governments will be able to avoid the issue of free riders and produce an efficient quantity in public goods. Lastly, when different transactions produce positive inefficiencies, then efficiency may be obtained when the government subsidizes the transaction (Bond & Hughes, 2013).
References
Bond, T., & Hughes, C. (2013). GCE A-level Economics Challenging Learn-By-Example (Yellow reef). Yellow reef Limited.
Branston, R., Cowling, K., & Sugden, R. (2006). International Review of Applied Economics. Corporate Governance and the Public Interest, 20(2).
Gunay, S. (2008). Corporate Governance Theory: A Comparative Analysis of Stockholder and Stakeholder Governance Models. iUniverse.
