ABSTRACT
The four key elements of corporate governance are transparency, responsibility, accountability, and fairness. Corporate governance’s fundamental objective is not only the fulfilment of the legal requirements, but also ensuring the board’s commitment to managing the company in a transparent manner for creating value. Stewardship theory posits a diametrically opposite view to that of agency theory, discounting any possible conflict between the executives and the owners of the organization. While agency theory and stewardship theory apply to the relationship between the owners and the executives, stakeholder theory applies to a broader societal perspective of corporate governance. Corporate governance models differ across geographies and much of the differences stem from the prevailing legal systems as applicable to companies. In the US, governance is regulated by legal statutes and regulations, where directors are held liable for non-compliance. This makes the governance model “rule-based”.
