INTRODUCTION: Corporate governance (CG) is one of the most talked about topics in business, indeed in society, today. Most academics, business professionals, and lay observers would agree that CG is defined as the general set of customs, regulations,habits, and laws that determine to what end a firm should be run. Much more fraught, however, is the question: “what defines good corporate governance?” NEED It is clear that CG exists at a complex intersection of law, morality, and economic efficiency. Less clear, however, is the extent to which current MBA education reflects that complexity. CG is usually not a distinct academic discipline, but integrated into other courses. Considering that issues of executive compensation, financial scandals, and shareholder activism are all tied up with CG, its teaching is a topic worth investigation. Companies pool capital from a large investor base both in the domestic and in the international capital markets. In this context, investment is ultimately an act of faith in the ability of a company’s management. In order to manage the affairs of a company and to act in the best interests of all at all times, there must be a system whereby the directors are entrusted with responsibilities and duties in relation to the direction of the company affairs. Corporate governance is a system of making Management accountable towards the stakeholders for effective management of the companies. Factors behind the Origin of Corporate Governance • • • • In the era of globalization, foreign investors have become very careful about investing their money. Kumar Mangalam Birla Committee Report appointed by SEBI has formulated some guidelines. Increasing active rate of investigative reporting in business journalism. Mergers and acquisitions taking place at a fast pace.

IMPORTANCE Principles of corporate governance revolve around three basic interrelated segments. These are: • Integrity and Fairness • Transparency and Disclosures • Accountability and Responsibility In other words, 'good corporate governance' is simply 'good business'.

Practices that the Board of Directors of a listed entity follows to fulfill

theexpectations of all stakeholders (i. e. Shareholders, employees, creditors, customers, government, regulatory authorities and society at large) is called corporate governance practices.

Good corporate governance practices ensure: • Adequate disclosures and effective decision making to achieve corporate objectives • Transparency in business transactions • Statutory and legal compliances • Protection of shareholder interests • Commitment to values and ethical conduct of business. • Long-term survival of the companies.

Specific steps to improve Corporate Governance
• • • Abolition of the Sick Industries Companies Act (SICA) and BIFR. Banking Secrecy Act – Reveal thosewho are wilful defaulters. Benami Transactions Prohibition Act and Prevention of Money Laundering Act

Corporate governance is the net result of the individual sense of values, the values held in society or part of a society like professional bodies or business associations and finally the system of public governance. If those who violate the norms are effectively punished then there is a fear and there will be adherence of the principles of corporate governance.

■ Issues of corporate governance are found in many disciplines at the MBA level, including Accounting, CSR/Ethics, Entrepreneurship, Law, Finance, Organizational Behavior, and Strategy ■ While a few MBA programs engage students in this fundamental debate, most define CG explicitly as a) making sure that boards and managers don’t lie, cheat and steal, or b) clarifying that shareholders are the “real owners” of the firm (a legal stance that appears to be untrue)