PHR®/SPHR® Professional in Human Resources Certification Study Guide, Third Edition

3.5. Corporate Governance

Corporate governance refers to the various influences and processes that impact the way corporations are managed and the relationship between its stakeholders, principally the shareholders, board of directors, and management. Other groups, including employees, vendors, customers, lenders, and members of the general public are affected by the way decisions are made in the process of governance. Let's look at the roles of each of the key stakeholders:

Shareholders

Shareholders are the owners of the corporation.

Board of directors

Members of the board of directors (BOD) are elected by the shareholders to represent the shareholders' interests with management. There are two types of directors: inside and outside. An inside ...