Corporate Governance is associated with balancing of hierarchical power and relationships between staff at the top management. While company management work towards fulfilling their duty and responsibility of ensuring whether the company is aligned with its strategic objectives "corporate governance” concept refers to the management of relationships between the company’s top management and all the stakeholders such as employees, suppliers, customers and other social institutions.
The concept of corporate governance also refers to monitoring and controlling top management’s decisions, policies and outcomes in terms of whether the top management is managing the company upholding the interests of the rights of shareholders and whether strategies that are develop in the right direction and in line with company’s mission.
Principles of corporate governance establishes the distribution of rights and duties allocated between different groups within the the organization.
Corporate governance policies, encompass principles which the companies top management should follow when making decisions and undertaking activities. Universally accepted, these principals which the senior management must adhere to in all its activities and decisions are fairness, transparency, responsibility and accountability.
Healthy corporate governance is a prerequisite for the development and growth of any business. The quality of corporate governance improves with the transition from family managed board to a company where the members of the board of directors are made up of independent professionals.
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