What is Corporate Governance?

2261 WordsFeb 19, 20189 Pages
Corporate Governance What is Corporate Governance? Corporate governance refers to the set of rules, procedures and processes which merge to form a structure or a system to control and direct companies/organizations. It is the manner or a specific set of ways in which the objectives of an organization are achieved. It is the body of structure which specifies rules and regulations so that the interests of stakeholders are not affected in achieving the goals of an organization. Corporate governance is a set of rules or a code of conduct by which organizations abide. Corporate governance applies to every aspect of the organization; it sets parameters for everyday transactions, employee relationships, rights and responsibilities, action plans, internal control, performance measures and corporate disclosure. it is the protocols which are implemented at any organization so that right and responsibilities are clear, no one’s interest is harmed or neglected and in case of a violation or complaint clear rules are present to judge the matter. The principals of corporate governance include Rights and equitable treatment of shareholders, Interests of other stakeholders, Role and responsibilities of the board, Integrity and ethical behavior and Disclosure and transparency. There are three theories of corporate governance; stewardship theory, agency theory and market theory. History of Corporate Governance The term corporate governance was first minted by Richard Eells (1960)
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