Financial leverage and corporate governance in Private Equity

Financial leverage and corporate governance in Private Equity

Abstract:

Financial Leveraging is one of the main tools for Private Equity funds in order to create shareholders value, but, on the other hand, it increases the risk of insolvency of the affected firms. This article reflects on the socio-economic impacts of this in-solvency risk and it makes some proposals in order to mitigate them, according to the international standards of Environmental, Social and Governance management.

Keywords: Financial Leverage, Social Responsible Investment, Corporate Governance, Social Risk management, Private Equity.