Management and shareholder interests must be aligned. Good governance structures ensure the decisions made by management mirror the best interests of the shareholders, thus reducing problems associated with agency. It involves transparency, accountability, and ethical practices important for investor trust and confidence in the company.
10. Financial Analysis and Planning
Lastly, corporate finance constitutes core elements in the form of continuous financial analysis and planning. An organization needs to track its finances from time to time through various tools such as financial ratios, forecasting, and scenario analysis. The on-going assessment by a business enables it to make proper decisions regarding its business, change according to the market drift, and prepare for future growth.