TABISH NISAR KHANMBA Central University of Kashmirkhantabish7@yahoo.com

NEED & ISSUES

The system of rules, practices and processes by which a company is directed and controlled.

Definition of 'Corporate Governance'

OECD Principles of CG states “Corporate governance involves a set of relationships between a company’s management, Its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined”

It is about promoting corporate fairness, transparency and accountability.

In other words, 'good corporate governance' is simply 'good business'. It ensures:

•Adequate disclosures and effective decision making to achieve corporate objectives;

•Transparency in business transactions;

•Statutory and legal compliances;

•Protection of shareholder interests;

•Commitment to values and ethical conduct of business.

It is about commitment to values, about ethical business conduct and about making a distinction between personal and corporate funds in the management of a company.

The aim of "Good Corporate Governance" is to ensure commitment of the board in managing the company in a transparent manner for maximizing long-term value of the company for its shareholders and all other partners.

The fundamental objective of corporate governance is to enhance shareholders' value and protect the interests of other stakeholders by improving the corporate performance and accountability

Further, its objective is to generate an environment of trust and confidence amongst those having competing and conflicting interests.

Principles of corporate governance

The Cadbury and OECD reports present general principles around which businesses are expected to operate to assure proper governance.

These are:

• Rights and equitable treatment of shareholders

• Interests of other stakeholders

• Role and responsibilities of the board

• Integrity and ethical behavior

• Disclosure and transparency

Adrian Cadbury

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Major Issues of Corporate Governance

•Duties of Directors.

•Composition and Balance of the Board.

•Remuneration and Reward of Directors.

•Shareholders 'rights and responsibilities.

•CSR and business Ethics.