|Corporate governance refers to having the appropriate people, processes and structures to direct and manage the business and affairs of the company to enhance long-term shareholder value, whilst taking into account the interests of other stakeholders. Companies that embrace the tenets of good governance, including accountability, transparency and sustainability, are more likely to engender investor confidence and achieve long-term sustainable business performance.|
This first paragraph of the Introduction to the Code of Corporate Governance (the “Code”) defines corporate governance and its benefits.
The key aspects of the definition are:
- Corporate governance refers to the system of structures, processes and people by which a company is governed.
- Governance means directing and managing the business and affairs of the company.
- The company is governed for the sake of stakeholders of the enterprise, not just the shareholders.
- The focus should be on enhancing long-term value creation.
- The tenets of good governance include accountability, transparency and sustainability.
The benefits of good governance are:
- It will likely lead to sustainable business performance.
- It will engender the confidence of investors.
B. Related Rules and Regulations
C. CG Guides
- Board Guide 1.1: Introduction [Corporate Governance].
D. Related Articles
- “Corporate governance – Why bother?” by Willie Cheng. (446KB)
- “Amplifying corporate reputation through corporate governance” by Wilson Chew. (464KB)
- “Branding corporate governance” by Philip Forrest. (442KB)