Corporate Governance is the interaction between various participants in shaping an institution’s performance and the way it advances. The relationship between the owners and the managers in an institution must be healthy and there should be no conflict between the two. The owners must see that individuals’ actual performance accords with the standard performance.
Corporate Governance has a broad scope. It includes both social and institutional aspects. Corporate Governance encourages a trustworthy, moral, as well as ethical environment.
Benefits of Corporate Governance:
- Good corporate governance ensures corporate success and economic growth.
- Strong corporate governance maintains investor’s confidence, as a result of which, the institution can raise capital efficiently and effectively.
- It lowers the capital cost.
- It assists in brand formation and development.
- Good corporate governance minimises wastages, corruption, risks and mismanagement.
- It ensures an institution is managed in a manner that fits the best interest of all.