What is meant by "corporate governance"?

Corporate governance refers to the system of rules, practices, and processes that direct and control a company. It encompasses the mechanisms through which companies, and particularly publicly traded companies, are operated, directed, and regulated, ensuring accountability, fairness, and transparency to stakeholders.

Good corporate governance helps to establish the framework for achieving a company’s objectives, while ensuring compliance with applicable laws and regulations. It involves various elements such as the board of directors' responsibilities, shareholder rights, and the relationships among various participants in the company, including management, shareholders, and other stakeholders.

This concept is crucial for fostering an ethical environment and encouraging a culture of responsibility within a corporation, which can ultimately lead to improved performance and sustainability over the long term.