Corporate governance purpose

  • What is the purpose of the corporate governance theory?

    Corporate governance is important because it creates a system of rules and practices that determines how a company operates and how it aligns with the interest of all its stakeholders.
    Good corporate governance fosters ethical business practices, which lead to financial viability.
    In turn, that can attract investors..

  • The corporate governance system was designed to help oversee the decisions and best interest of the shareholders.
    The system should works accordingly: The shareholders elect directors, who in turn hire management to make the daily executive decisions on the owner's behalf.

What is corporate governance?

Corporate governance is a set of rules, practices, and processes used to direct and control an organisation in the best way possible.


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