Corporate governance

Corporate governance can be defined as a system of processes, practices, and rules through which companies are directed and controlled. It entails balancing the interests of different stakeholders in an organizations including, among others, financiers, customers, suppliers, the management, shareholders, and the government (Anand 2008). Corporate governance enables companies to develop frameworks integral to attaining their objectives. It encompasses almost every sphere of management ranging from internal controls and action plans to corporate disclosure and performance measurement. This is a system imperative to the success of companies in the contemporary world. The board of directors plays an essential role in the achievement of corporate governance goals and objectives. It elects both the chief executive officer (CEO) and the general managers (Kota & Bindu Tomar 2010). It is also within their mandate to ensure the development of business strategies and assess the overall direction of their organization (Wood & Demirbag 2012). The CEO and the general manager are charged with hiring other employees of the company in question. Equally, they oversee the day to day running of the business.

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