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if a company has poor governance and poor stakeholder management that exposes it to several risks on the other hand effective governance and effective stakeholder management will lead to many benefits lets start with the risks of poor governance and stakeholder management a major risk is weak control systems so if a company has poor control systems this will lead to inefficient monitoring so if shareholders cannot oversee what the board or directors are doing or the board or directors do not carefully monitor what management is doing then there is the risk of one stakeholder group benefiting at the expense of the company a classic situation is where the board of directors does not adequately control and monitor management and management then makes decisions that benefit them at the expense of the company another issue is ineffective decision making as we have said in other parts of this reading there is the risk of information asymmetry between management and the board now lets say
