Corporate Governance

Corporate governance is the set of processes,

customs, policies, laws and institutions affecting the
way a corporation is directed, administered or
controlled. Corporate governance also includes the
relationships among the many stakeholders involved
and the goals for which the corporation is governed.
Nature of Corporate Governance
 Corporate Governance is concerned with the process
by which corporate entities are governed.
 Corporate Governance is a way of life and not a set of
rules.
 The basic element of good governance is transparency
projected through good governance.
 Corporate governance is a multi-faceted subject.
Parties to corporate
governance
Parties involved in corporate governance
include the regulatory body:-

 Chief Executive Officer

 Board Of Directors
 Management
 Shareholders
Other Stakeholders who take part
include:-

• Suppliers
• Employees
• Creditors
• Customers &
• Community at large
Principles of Corporate Governance

 Rights & equitable treatment of shareholders

 Interest of other stakeholders
 Role & responsibilities of the board
 Integrity & ethical behaviour
 Disclosure & tranparancy
Internal Corporate External Corporate
Governance Controls Governance Controls

 Competition
 Monitoring by the  Government regulations
Board of Directors  Managerial labour market
 Remuneration  Media pressure
 Telephone tapping
Reasons why more interest in Corporate
Governance

 To make the Directors realize that their

main job is to represent the share holders
and other stake holders
 To safeguard the interest of the
shareholders
 To protect the interest of the shareholders
 Value creation for society
 Leadership values