Corporate governance refers to the rules, structures, customs and procedures that influence how people direct, manage and control a business. This my link means creating a long-term vision for business and recording the processes that support it, and evaluating the performance regularly. Good corporate governance is based on the principles of transparency, accountability, diversity and fairness.
This requires that a company discloses all relevant information such as financial results as well as meeting minutes and the outcomes along with any changes to normal operations and resignations and replacements of key management and board members. This encourages honesty, integrity and willingness to share both good and bad information with employees, shareholders and vendors, the community and other stakeholders.
In general, the board’s responsibility is to establish the system of checks and checks and balances the shareholders to ensure they are treated fairly and that management decisions are sound. This includes ensuring that internal controls are effective to ensure compliance with laws and regulations.
Different models of corporate governance are used all over the world. The most widely used is the Anglo-American model which prioritizes the interests of shareholders in decision-making and management. This model is widely utilized by companies in many countries however other governance models are also available. These models are all similar and have the same fundamental principles even though they differ.