Term of the Day - 19 February 2024

Today’s Term is “Corporate Governance”.

Corporate Governance is a framework of rules, practices, and processes by which a company is directed, controlled, and held accountable to achieve its objectives and protect the interests of its various stakeholders. It encompasses the relationships among a company's management, its board of directors, shareholders, and other key stakeholders, emphasizing transparency, accountability, fairness, and integrity in decision-making.

Key aspects of corporate governance include:

1. Board of Directors: The board plays a pivotal role in corporate governance, overseeing the company's strategic direction, risk management, and the performance of executives.

2. Shareholder Rights: Corporate governance ensures that shareholders, as owners of the company, have the right to participate in key decisions and receive timely and accurate information.

3. Ethical Conduct: Companies are expected to operate ethically, with corporate governance frameworks promoting integrity, responsible business conduct, and compliance with laws and regulations.

4. Disclosure and Transparency: Transparent reporting and disclosure practices foster trust among stakeholders, providing them with clear insights into the company's financial health, operations, and decision-making processes.

5. Risk Management: Effective corporate governance includes mechanisms for identifying, managing, and mitigating risks to ensure the company's long-term sustainability.

Well-implemented corporate governance enhances investor confidence, reduces the likelihood of corporate scandals, and contributes to the overall stability and success of a company in the long run.