Corporate governance refers to the structures, customs, policies and procedures that affect the way people manage, direct and oversee a business. This includes developing a long-term vision of business and documenting the processes that are in support of it, and regularly evaluating performance. Corporate governance should be based on the principles of transparency and accountability.
This requires that a company discloses all relevant information such as financial results as well as meeting minutes and results along with any changes to normal operations and resignations and replacements of board members and managers. This encourages honesty, integrity and a willingness to communicate both good and bad news with employees, shareholders as well as the community.
The primary function of the company’s board of directors is to establish a system of checks and balances to ensure shareholders are treated fairly and that decisions made by management are sound. This includes making sure that internal controls are efficient to ensure compliance with the laws and regulations.
Around the globe, a variety of models of corporate governance are in use. Anglo-American models that place the interests of shareholders at the forefront of management and decision-making is the most popular. This approach is widely used by businesses across a variety of countries However, there are many other governance models that exist. They my link are all similar and share a few fundamental principles, even though they differ.