An Overview of the Concept of Corporate Governance

It is an obvious fact that corporations are significant entities in society, the prosperity of which would lead to the prosperity of the nation as a whole and it will result in the amelioration of the corporations’ reputation in the global market. A standard corporate governance of a corporation has an advantage over its competitors and it is significant to the progression of the economy and society. Good corporate governance attracts investments from both the FIIs and DIIs who play active and significant roles in the robust capital structure of a corporation and the Indian capital market. It paves the way for more foreign collaborations at ease. It gained its popularity most recently due to the critical upward trend of corporate frauds, say, the Maxwell Corporation Scam (1991), the Barings Bank Scam (1995), the Enron debacle (2011), the WorldCom Scam (2002), the Parmalat Scam (2003), the Satyam Scam (2009), etc. These high-profile corporate frauds resulted in the instantaneous need for sound corporate governance. The study of corporate governance is significant to identify and curb the corporate frauds that result from governance failure; to ensure the long-term sustainability of the corporation by complying with the legal and regulatory framework; to develop the globally accepted principles of corporate governance and to understand how the corporate governance promotes and enhances the four core pillars say, transparency, accountability, responsibility and fairness in the corporate world.