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Simple English definitions for legal terms
corporate governance
Read a random definition: Food, Drug, and Cosmetic Act
A quick definition of corporate governance:
Corporate governance is like a set of rules that a company follows to make sure everyone is doing their job properly. It helps the company achieve its goals and makes sure everyone is working together. The board of directors is the most important group in corporate governance. They make sure the company is doing well and report to the people who own the company.
A more thorough explanation:
Definition: Corporate governance is the set of rules, practices, and procedures that guide and control a company. It helps to achieve corporate goals and monitor performance. Corporate governance involves balancing relationships, interests, and responsibilities among a company's management, board of directors, shareholders, and other stakeholders. The board of directors is responsible for the governance of the company, including setting strategic goals, providing leadership, overseeing management, and reporting to shareholders.
- A company's board of directors is responsible for ensuring that the company is managed in the best interests of its shareholders.
- The board of directors must approve major decisions, such as mergers and acquisitions, and ensure that they are in the best interests of the company and its shareholders.
- The board of directors must also ensure that the company complies with all relevant laws and regulations.
These examples illustrate how corporate governance helps to ensure that a company is managed in the best interests of its shareholders and other stakeholders. The board of directors plays a crucial role in this process by setting strategic goals, providing leadership, overseeing management, and reporting to shareholders. By doing so, the board helps to ensure that the company is well-governed and able to achieve its goals.