Corporate GovernanceDefine and Explain Corporate Governance a Function(s) and a Mechanism(s) and Evaluate the Role of Corporate Governance in a Chosen Case Organization Student Name: Student Number: Lecturer: Date: 20/12/Table of contents1. Introduction32. Literature Review.52.1 Definitions of corporate governance.52.2 Mechanisms of corporate governance.102.2.1 Internal Mechanism.112.2.2 External Mechanisms.13 2.3 Evaluation of corporate governance.133. A Shell Case Study.163.1 The principle-agent problems and key stakeholders of Shell.163.2 Ways to balance stakeholders interests.173.2.1 Ways to balance internal stakeholders interests.173.2.2 Ways to balance external stakeholders interests.183.3 Comments on Shells Corporate Governance policies.204. Conclusion.225. Reference231. IntroductionModern corporate situations are characterized by the globalization of technologies and information, posing a challenge for corporate management. The distribution of rights and responsibilities among different participants in the corporation and the rules and procedures for making decisions in corporate affairs are becoming vital important. In such a defined context, corporate governance tends to evolve from the corporations objectives. The form of a corporate can be dated back to several centuries ago, while since Adam Smith, many problems about corporate have been put forward. The study of corporate governance appeared with the emerging share market. In the 1980s, the concern of corporate governance reached an unprecedentedly high level. The reasons can be drawn from the worldwide privatization wave, the Asian financial crisis, several corporate scandals and an increasingly severe corporate credit. Since then, it became a heat topic and received attention from all circles. According to Douglas Branson, a famous law professor at the University of Pittsburgh, when he published the first book about corporate governance, there had been no relevant book on corporate governance. But now, even many professional ideas and suggestions have been raised. From the international background, a general function of corporate governance can be drawn, that is to monitor the actions, policies, practices, and decisions of corporations, in an attempt to achieve the interests of stakeholders. The importance of study on corporate governance cannot be overestimated, for it can both help people learn better the problem itself, but also provide guide for a corporate. Following the targets of management powers and shareholder involvement, this paper intends to study further corporate governance. Based on a deductive approach, this paper is composed of two distinct but strictly connected parts: the first theoretical part will define the concept, explain the mechanisms and pose the evaluation of corporate governance. The second case part consists of a constant analysis of Shell, adding practicality and applicability to the study. 2. Literature Review2.1 Definitions of corporate governanceAlthough people from different spheres have made numerous comments and tried very hard to define the term “corporate governance”, they have never reached a consensus. A possible reason is that this term covers such a wide range of economic phenomena that it is really hard to give an exact definition to it. Some experts hold the view that corporate governance refers to the description of the governance quality inside the corporate while others think that it should be defined as the process of restricting the corporate management. However, things can be very different from the perspective of investors because investors may regard it as an inspiriting factor for the corporate to behave in accordance with the corporate ethics or to make full use of the stock rights as an investing skill. Due to the fact that different people have different interest and advantages in this field, they may have different definitions. Hart (1995) is the economist who clearly put forward the problem of corporate governance in theory at an early time. According to his analysis, there are two factors contributing to the necessity of the existence of corporate governance. The first one is the subject of agency, involving members in the corporate such as the owner and the manager. The other factor is the existence of transaction cost which leads to the result that the subject of agency mentioned above cannot be solved by signing contracts. If there is not the subject of agency, there will be no need to inspire before the operation and no dispute to be solved after it. If all the problems-the