What is Corporate Governance and it's factors?

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 What is Corporate Governance?

Corporate governance is framework which includes rules, relationship, systems and processes within and by which authority is exercised and controlled within organization. 

Corporate governance is best management practice for the operation of the company plus for society which is termed as social responsibility.  It helps in proper distribution of wealth created through  different operation within organization. 

Corporate governance is also about the transparent operation with fairness and accountability, reliability at different levels of the organization keeping in view the reputation of the organization and keeping up to maintain it.

The above statement is my understanding of what I understood after reading almost 3 page definition. 

But talking about the crux, it is all about a very normal operation that is conducted in a organization which is management but the management have roots till core of earth that means it's not only the organization is involved in this but also the government, the people of respective country, the competitors, customers and then the investors also are involved. That's how corporate governance takes place. 


“Corporate Governance is concerned with the way corporate entities are governed, as distinct from the way business within those companies are managed. Corporate governance addresses the issues facing Board of Directors, such as the interaction with top management and relationships with the owners and others interested in the affairs of the company” RobertIan (Bob) Tricker (who introduced the words corporate governance for the first time in his book in 1984).

Advantages of Corporate Governance

1. Good corporate governance ensures corporate success and economic growth.
2. Strong corporate governance maintains investors’ confidence, as a result of which, company can raise
capital efficiently and effectively.
3. There is a positive impact on the share price.
4. It provides proper inducement to the owners as well as managers to achieve objectives that are in
interests of the shareholders and the organization.
5. Good corporate governance also minimizes wastages, corruption, risks and mismanagement.
6. It helps in brand formation and development.
7. It ensures organization is managed in a manner that fits the best interests of all.
8. It reduces cost and aids in long term sustenance and growth of the Company 

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