Corporate Governance

According to the Cadbury Committee, corporate governance is the “system by which companies are directed and controlled.” It is a set of systems, processes and principles which ensure that a company is governed in the best interest of all stakeholders. It is about promoting corporate fairness, transparency and accountability.

Importance of Corporate Governance

Good corporate governance benefits not only the company but also the environment around it in the following way;

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Corporate Sustainability: Corporates that are run in the best interests of all the stakeholders enjoy the trust and confidence in the organisation and provide long-term sustainability.
Premium: Well governed companies across the world command a premium of anywhere between 10 to 40 percent more than their not so well governed counterparts.
Curbing Nepotism: Good corporate practices curb nepotism and favouritism while valuing merit in appointments.
Foreign Investment: Good corporate practices based on transparency and sound business principles attract foreign investment, which is much more liberalised now.
Vulnerable to Corruption: Often scandals and fraud within a company become more likely where directors and senior management do not have to comply with a formal governance code.

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