Corporate Governance encompasses the frameworks and mechanisms within a company that dictate how decisions are made, stakeholders' interests are addressed, and company objectives are pursued. It involves the board of directors, management, and other internal as well as external stakeholders like shareholders and regulators. Effective corporate governance ensures transparency, accountability, and fairness in a company’s operations, protecting the interests of shareholders and other stakeholders alike.

For example, having an independent board of directors to oversee the actions of executive management is a practice of good corporate governance aimed at avoiding conflicts of interest. Similarly, corporate governance principles guide the preparation of financial statements by enforcing standards that ensure accuracy and reliability. Companies that adhere to robust corporate governance frameworks tend to foster stakeholder trust and improve their market reputation.

In summary, corporate governance is about building a responsible and efficient corporate structure that ensures the company is run in a manner beneficial to all stakeholders.