Corporate governance is the central point for the development of a market economy. The success of it depends on appropriate government control and effective cooperation between the private and the public sector. The classical definition of corporate governance in the developed industrial nations reveals that essentially it is how companies deal fairly with problems that result from the separation of ownership and effective control, i.e., internal structure and rules of the board of directors, the creation of independent committees, rules for disclosure of information to shareholders and creditors and control of management, etc.
The concerns of corporate governance nowadays are not limited to the developed countries but also to the developing ones. Finance is an effective element for efficient development of an economy if rules and regulations are maintained in all respects. In order to run companies, fund is the number one element which also contributes towards good governance of the company. Companies require external funding gradually when they expand. For long-term sustainability, it needs long term external funding. Corporate governance helps companies by enhancing corporate value, enhancing capital efficiency and lowering cost of capital. It also ensures fair competition in the economy and helps achieving of sustainable growth and helps society to fight corruption.
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