Abstract

The framework that directs and controls businesses is known as corporate governance, according to the Cadbury Report (1992). A corporation is an entity typically a collection of individuals or a business that has been granted permission by the state to function as a single unit (a legal entity, or a legal person in a legal context), and that has been officially recognised as such by the law for certain purposes. Being a legal entity, a company exists independently of its owners, known as stockholders. With the majority of a real person’s rights and obligations, a company is regarded as a “person”. A company pays income taxes but is not permitted to vote or run for public office. A stock exchange is where publicly traded companies trade their stock. A public corporation may have hundreds, perhaps millions, of shareholders. Privately held companies often have a small number of owners and their stock Is not traded on an exchange. An organization's system of control and operation, as well as the procedures by which it and its members are held accountable, are all included in governance. Governance includes administration, compliance, ethics, and risk management. A useful definition of ”corporate governance” is given by the OECD, which states that it is “the system by which business corporations are directed and controlled.”

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