Corporate Governance - The Role of Various Stakeholders

Abstract

Corporate Governance is basically a system of making directors accountable to shareholders for effective management of the companies in the best interests of the company and shareholders, along with concern for ethics and values. It is management of companies - with concern for ethics and values. It hinges on complete transparency, integrity and accountability of the management which includes executive and non-executive directors. Report of Securities and Exchange Board of India (SEBI) committee on Corporate Governance defines corporate governance as, "The acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal & corporate funds in the management of a company. " The definition is drawn from the Gandhian principle of trusteeship and the Directive Principles of the Indian Constitution. Corporate Governance is viewed as ethics and a moral duty.