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Corporate governance is the process of setting rules, policies, controls and resolutions to foster a positive corporate culture and behaviour. It also protects organisations against business dangers and crises, such as cyber-security threats, corruption in leadership as well as economic downturns and political instabilities. It also includes contingency plans that helps companies cope with these forces of business and become stronger and more resilient.

Corporate governance structures and procedures differ based on a company’s sector of operation, ownership structure and jurisdiction. These governance structures and practices, despite their differences, should all have the same aim: creating long-term value for shareholders. They should also provide flexibility to adapt and modify their governance practices if needed to accomplish this goal.

The board of directors of a company is responsible for setting goals for the company’s strategic direction, appointing senior management and monitoring them, and representing the shareholders’ interests. The board members must understand their responsibilities, and work with the company’s senior management to ensure that these responsibilities are carried out in a way that promotes business growth and financial performance.

Stakeholders should be urged to take part in shareholder outreach and dialogue with the board and management of an organization. This will enable them to make their views recognized in areas that traditionally, have fallen within the authority of the board and management–such as strategic direction and decisions. In doing so it is vital for the board and management to be transparent and open with their stakeholders about their governance structures and practices and their motivations for using them.