Final answer:
The primary participants in corporate governance are shareholders, the board of directors, and management. These groups work together to ensure a company is run in the interest of its owners, with the board providing oversight for top executives.
Step-by-step explanation:
The key participants in corporate governance are shareholders, the board of directors, and management. Shareholders are the owners of the company and elect the board of directors as their representatives to oversee the company's management and operations. The board of directors is responsible for the governance and strategic oversight of the company, ensuring the interests of the shareholders are protected. Management, on the other hand, handles the day-to-day operations of the company, making decisions that affect its direction and profitability. Additionally, auditing firms and outside investors can also play roles in corporate governance by providing oversight and ensuring transparency in the company's financial reporting. Corporate governance aims to ensure that the firm operates in the interests of shareholders, but challenges may arise when top executives have influence over board member selection, as observed in the case of Lehman Brothers' failure.
The three participants in corporate governance are:
The shareholders: These are the individuals or entities that own shares in a company and have a financial stake in its success.
The board of directors: This group is elected by the shareholders and is responsible for overseeing the company's management and making important decisions.
The management: This includes the top executives and managers who are responsible for running the day-to-day operations of the company.