Q.Explain the meaning and principles of corporate governance.

Corporate governance is the system of rules and processes that directs and controls a company, built specifically to manage the risk created when ownership and management are separated. …

Corporate governance refers to the system of rules, practices and processes by which a company is directed and controlled — the framework of accountability between a company's Board of Directors, its management, its shareholders and its other stakeholders. It is needed most sharply in a modern joint stock company, where ownership (numerous, often widely dispersed shareholders) is separated from management (the Board and executives who actually run the company), creating a risk that managers may pursue their own interests at shareholders' expense unless properly checked.

Good corporate governance rests on a small set of widely recognised principles. Transparency requires timely, accurate and adequate disclosure of material information about the company's finances, ownership and governance. Accountability holds the Board answerable to shareholders and management answerable to the Board. Fairness requires equitable treatment of all shareholders, including minority shareholders, and of other stakeholders such as employees and creditors. Independence requires that a sufficient proportion of the Board be independent directors, free of material relationships with the company that could compromise objective judgment. Responsibility requires the Board to genuinely own the company's strategy, risk management and legal compliance. Finally, corporate governance works only where it is grounded in genuine ethical conduct, not followed as a mere paper formality. …

Listing corporate governance principles without connecting them back to the underlying reason they exist — the separation of ownership from management, and th …