Corporate Governance is defined as the processes and structures by which business and affairs of a corporate sector are directed and managed.
OBJECTIVES OF CORPORATE GOVERNANCE
- To build up an environment of trust and confidence amongst those having a competing and conflicting interest in the company.
- To enhance shareholders value and protect the interest of other shareholders by enhancing the corporate performance and accountability.
FOUR PILLARS OF CORPORATE GOVERNANCE
Corporate Governance ensures that management is accountable to the Board and Board is accountable to shareholders.
Corporate Governance protects the shareholder’s rights and treats all shareholders including minorities in an equitable manner. It provides effective redress measures for violations.
A good Corporate Governance ensures timely, accurate disclosure of all material matters, including the financial situation, performance, ownership transfers, etc.
Corporate Governance ensures that the procedures and structures are in place so as to minimize or avoid conflicts of interest. It assures that independent directors and advisors are free from the influence of others.
- Sir Adrian Cadbury Committee to address the issues related to corporate governance in United Kingdom.
- Corporate Governance report of Singapore Government.
- Sarbanes-Oxley Act, 2002 by the American Congress which came into effect in July 2002 to address all the issues associated with corporate failures to achieve quality governance and to restore investors confidence.