Corporate governance is about the way in which board of directors oversees the running of a company by its managers, and how board members are in turn accountable to shareholders and the company. This has implications for company behaviour towards employees, shareholders, customers and banks.
Good corporate governance plays a vital role in underpinning the integrity and efficiency of financial markets. Poor corporate governance weakens a company's potential and, at worst, can pave the way for financial difficulties and even fraud. If companies are well-governed, they will usually outperform other companies and will be able to attract investors whose support can help to finance further growth.
Primarily, the governance of companies is the subject matter of the Companies Act and the law has made a number of provisions for corporate governance for centuries.
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