Corporate governance broadly refers to the mechanisms, relations, and processes by which an organisation is controlled and directed. It is the framework of rules and practices by which a board of directors ensures accountability and transparency in an organisation’s relationship with its stakeholders. The framework consists of: (a) explicit and implicit contracts between the organization and its stakeholders for the distribution of responsibilities, rights, and rewards; (b) procedures for reconciling the sometimes conflicting interests of stakeholders in accordance with their duties, privileges, and roles; and (c) procedures for proper supervision, control and flow of information to serve as a system of checks and balances.
Corporate governance focuses on leadership, sustainability and good corporate citizenship. Moral, ethical and effective leadership is the essence of good governance. Such leadership directs an organisation’s strategies and operations with a view to achieving sustainable economic, social, and environmental performance. It is the primary responsibility of the board of directors for the governance of the organisation, including: (a) setting strategic objectives; (b) providing the necessary leadership to implement the strategies; (c) supervising the management of the organization; and (c) periodic reporting on its stewardship to the concerned Minister and the Legislature in the case of public entities. All directors, whether or not they have executive responsibilities, are responsible for the stewardship of an organisation’s assets. They also have a monitoring role to play and ensure that the necessary controls are in place and are working satisfactorily.
The board of directors provides effective oversight of the management of the organization and a sense of direction and leadership. It speaks with the collective voice of the individual members who work with quiet competence in the furtherance