What is the definition of Corporate Governance?
Corporate governance the system by which companies are
directed and controlled. It involves regulatory and market mechanisms, and the
roles and relationships between a company’s management, its board, its
shareholders and other stakeholders, and the goals for which the corporation is
governed. Lately, corporate governance has been comprehensively defined as a
system of law and sound approaches by which corporations are directed and
controlled focusing on the internal and external corporate structures with the
intention of monitoring the actions of management and directors and thereby
mitigating agency risks stemming from the devious deeds of these corporate
officers.
Corporate governance consists of the set of
processes, customs, policies, laws and institutions affecting the way people
direct administer or control a corporation. Corporate governance also includes
the relationships among the many players involved (the stakeholders) and the
corporate goals. The principal players include the shareholders, management,
and the board of directors. Other stakeholders include employees, suppliers,
customers, banks and other lenders, regulators, the environment and the
community at large.
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