Corporate Governance

Corporate Governance means all actions which are taken for creating the good relationship between management and shareholders. Day to day news and media are calling it with different name like business ethics, business good conduct, values and transparency in company works. But theme is that it is the process of creating good relationship between management and shareholders of company.

SEBI writes clear in its report that board of directors are just trustee of company and real owners are shareholders. So, not only financial statements must show true and fair financial information but every action of company must be truthful and useful for the shareholders of company. SEBI had also banned inside trading for good corporate governance.

Now next question is " How can corporate governance establish in company?"

There is no fix rules and regulation for establishing and not any Indian or foreign law who pressurizes to apply the corporate governance rules but following the all the laws of companies and other will be automatic use of corporate governance.

 I liked wikipedia's lines in which following principles should be added in Corporate Governance :

1. Rights and equitable treatment of shareholders
2. Interests of other stakeholders
3. Role and responsibilities of the board
4. Integrity and ethical behaviour
5. Disclosure and transparency

In the interview with CNBC, Dr. Saurabh Srivastava said, " Board of director must not violate the separate business entity concept. If board of directors uses company's property for personal use, its record must be kept proper way in company and board of director should pay all these charges and never throw this burden on shareholders.