Corporate governance is the term given to the system of rules, practices, and processes by which a company is directed and controlled. It establishes the framework within which a company’s objectives are achieved while satisfying the interests of various stakeholders. Effective corporate governance ensures transparency and accountability in the company’s operations. It ensures that the company operates ethically and has strong controls. By clearly establishing the roles and responsibilities of the board of directors and management, corporate governance helps minimize risks and prevent fraud. It also helps build investor confidence.
Key Points:
Promotes transparency and accountability
Defines roles and responsibilities
Strengthens risk management and investor confidence