Business Ethics and Corporate Governance, Second Edition

DEFINING CORPORATE GOVERNANCE

In its narrowest sense, corporate governance can be viewed as a set of arrangements internal to the corporation that define the relationship between the owners and managers of the corporation. Corporate governance ‘… is the relationship among various participants in determining the direction and performance of corporations. The primary participants are (i) the shareholders, (ii) the management and (iii) the board of directors.’

The World Bank defines corporate governance from two different perspectives. From the standpoint of a corporation, the emphasis is put on the relations between the owners, management board and other stakeholders (employees, customers, suppliers, investors and communities). Another perspective ...