AIM 6377

Corporate Governance is the structured system of policies and processes established and maintained by a board of directors to oversee an organization's strategic activities and resulting performance. The system is in place to ensure proper accountability, probity and openness in the conduct of an organization's business for the long-term benefit of its shareholders. As such, Corporate Governance focuses on and effectuates the relationships among a company's board of directors, top management, investors (particularly institutional investors), and various other stakeholders. In essence, Corporate Governance "…is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society" (Sir Adrian Cadbury in 'Global Corporate Governance Forum', World Bank, 2000). Corporate Governance encompasses such matters as:

Board size, structure, membership, member nomination, election and tenure
Committee structure and the nature, composition, and duties of the individual committees
Rights, responsibilities and relationship of directors, management, and shareholders
Policies/procedures relating to accounting, auditing, executive compensation and financial reporting