Corporate governance is the system by which companies are directed and controlled. It defines the rights and responsibilities of shareholders, the board of directors, managers, and other stakeholders, and it provides the framework for achieving company objectives.

Good governance includes accountability, transparency, fairness, and responsibility. It covers board structure, executive compensation, audit, risk management, and shareholder rights. Codes and regulations such as the Sarbanes-Oxley Act and the UK Corporate Governance Code set standards.

Key points

• System of direction and control
• Defines rights and responsibilities
• Includes accountability and transparency
• Governed by codes and regulations