Corporate governance refers to a combination of laws, regulations, procedures, implicit rules, and voluntary practices which help companies perform efficiently and maximize long-term value for shareholders, while also safeguarding the interests of other stakeholders such as buyers, government, and society at large. Lenders—both national and international—also consider governance standards before extending credit. It is primarily based on transparency, fairness, and proper disclosure.
As companies grow in size, governance becomes increasingly critical. SEBI and stock exchange listing agreements mandate adherence to corporate governance requirements to ensure accountability and transparency in corporate operations.