Corporate governance means the way companies are run and controlled. It involves the rules and processes that guide how a company operates. The goal is to make sure everyone involved, like shareholders, managers, customers, suppliers, lenders, the government, and the community, all get treated fairly.
Some important things in corporate governance are:
- Board of Directors: These are the people who make important decisions for the company. They set up rules to make sure the company works well.
- Accountability: This means being responsible and honest. Good corporate governance makes sure the company is safe, honest, fair, and follows the rules.
- Fair Treatment: Everyone connected to the company, like shareholders, customers, and workers, should be treated the same way and be treated fairly.
- Corporate Disclosure: The company should tell everyone about the things it does and how it makes decisions. This keeps everything clear and honest.
- Risk Management: People in charge should watch out for problems that might hurt the company and figure out how to deal with them.
Corporate governance is super important for a company to work well and keep its good name. If a company follows good corporate governance, it can make money and grow in the long run. But if it doesn’t, it can have problems like not reaching its goals, losing support from people involved, losing money, or even going out of business.