According
to Cadbury Committee of U.K, 1992 -
“Corporate
governance is the system by which companies are directed and controlled. It
encompasses the entire mechanics of the functioning of a company and attempts
to put in place a system of checks and balances between the shareholders,
directors, employees, auditor and the management.”
Institute
of Company Secretaries of has defined corporate governance as such-
“Corporate Governance is the application of
best Management practices, Compliance of law in true letter and spirit and
adherence to ethical standards for Effective Management and distribution of
wealth and discharge of social Responsibility for sustainable development of
all stakeholders”.
According
to Organization for Economic Co-operation and Development ―
Corporate
governance is the system by which business corporations are directed and
controlled. The corporate governance structure specifies the distribution of
rights and responsibilities among different participants in the corporation,
such as, the board, managers, shareholders and spells out the rules and
procedures for making decisions on corporate affairs. By doing this, it also
provides this; it also provides the structure through which the company
objectives are set, and the means of attaining those objectives and monitoring
performance.”
Lastly, we can say
that, corporate governance is a mode by which the management is motivated to
work for the betterment of the real owners of the corporation i.e., the
shareholders keeping a balance between economic and social, individual and
communal interest.
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