Definition of Corporate Governance

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2.1 Definitions of Corporate Governance
There are many definitions for corporate governance. Sir Adrian Cadbury in his 1992 Report on the Committee on Financial Aspects of Corporate Governance p.15 says “Corporate Governance is the system by which companies are directed and controlled.” Another definition is, “corporate governance can be defined as the stewardship responsibility of corporate directors to provide oversight for the goals and strategies of a company and foster their implementation.”(Cornelius 2005, p. 12). The OECD Glossary of Statistical Terms website (2010) states that corporate governance refers to “procedures and processes according to which an organisation is directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organisation – such as the board, managers, shareholders and other stakeholders – and lays down the rules and procedures for decision-making.” The Financial Times Lexicon website (2010) defines corporate governance as “How a company is managed, in terms of the institutional systems and protocols meant to ensure accountability and sound ethics. The concept encompasses a variety of issues, including disclosure of information to shareholders and board members, remuneration of senior executives, potential conflicts of interest among managers and directors, supervisory structures, etc.” Brancato and Plath (2003) p.8 say “Corporate governance is defined in this report as a system of checks and balances between the board, management and investors to produce an efficiently functioning corporation, ideally geared to produce long-term value.” Fahy et al (2004) p.163 say “Put in its simplest form, corporate governance is the systems and processes put in place to direct and control an organisation in order to increase performance and achieve…...

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