Definition of corporate governance:-The Manner in which a Corporation is run for, Achieving its Objectives, Transparency of its Operations, Accountability & Reporting and for Good Corporate Citizenship.
Corporate Governance is required for the:
- Rights of Shareholders
- Equitable treatment of shareholders
- Role of stakeholders in corporate governance
- Disclosure and transparency
- Responsibilities of the board
The governance issues which are crucial to achieve these objectives are:
- Distinguishing the roles of board and management
- Separation of the roles of the CEO and chairperson.
- Should the board have committee
- Director’s and executive’s remuneration.
- Protection of shareholder right and their expectations
The benefits of Corporate Governance are
- Creation and enhancement of a corporation’s competitive advantage
- Enabling a corporation performs efficiently by preventing fraud and mal practices.
- Providing protection to shareholders’ interest
- Enhancing the valuation of an enterprise
- Ensure compliance of laws and regulations.