Saakshi Sharma, NMIMS School of Law
Introduction
The word ‘governance’ barely existed 3 decades ago. However, today it has become a word used commonly and not just in companies but also for charities, universities or local authorities. Generally, governance can be described as an action or manner of governing a state or organization. It has become an abbreviation for how an organization must be run with emphasis on accountability, integrity and risk management.
Corporate governance is a system through which companies are directed and controlled. The Board of directors are made responsible for the company’s right governance. The shareholders too play a role in the governance of a company. The shareholders appoint the auditors and directors in order to satisfy themselves that they have a proper governance structure in place. Responsibilities of a board comprise of fixing strategic aims of the company, leading the company to put the strategic aims into effect, supervising, business management and reporting to the shareholders. All actions of the board are subjected to laws, regulations and the shareholders in a general meeting.1
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