Corporate governance is important because it creates a system of rules and practices that determines how a company operates and how it aligns the interest of all its stakeholders. Good corporate governance leads to ethical business practices, which leads to financial viability. In turn, that can attract investors.
Corporate governance is important as it
enables organisations to achieve their goals, make formal decisions, control risks and assuring compliance. Good corporate governance incorporates a set of rules that define the relationship between stakeholders, management and the board of directors of a company and influence how the company is operating.Good corporate governance
fosters a culture of integrity and leads to a positive performing and sustainable business. Good governance signals to the market that an organisation is well managed and that the interests of management are aligned with other stakeholders. As such, it can provide businesses with a competitive advantage.
Corporate governance lays the foundation for how a company handles its operations, uses its resources, applies innovation and implements corporate strategies. Through these, it also improves a company’s efficiency. An important area that
corporate governance introduces is corporate social responsibility.A company’s
corporate governance establishes the company’s direction and business integrity, promotes financial viability, and builds trust with investors and the community.,Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled