Corporate governance is concerned with set of principles, ethics, values, morals,
rules regulations & procedures etc. Corporate governance establishes a system whereby
directors are entrusted with duties and responsibilities in relation to the direction of
the company’s affairs.
The term “governance” means control i.e. controlling a company, an organization
etc or a company & corporate governance is governing or controlling the corporate
bodies i.e. ethics, values, principles, morals. For corporate governance to be good,
the manager needs to meet its responsibilities towards its owners (shareholders),
creditors, employees, customers, government and the society at large. Corporate
governance helps in establishing a system where a director is showered with duties
and responsibilities of the affairs of the company.
For effective corporate governance, its policies need to be such that the directors
of the company should not abuse their power and instead should understand their
duties and responsibilities towards the company and should act in the best interests
of the company in the broadest sense.
The concept of ‘corporate governance’ is not an end; it’s just a beginning towards
growth of company for long term prosperity.