ABSTRACT
There are several definitions and explanation of corporate governance based upon different theoretical perspectives. For example, according to Cadbury Report (1992: 15), corporate governance is “a system by which companies are directed and controlled.” In the words of Shleifer & Vishny (1997: 737), corporate governance is a “process in which suppliers of finance to corporations assure themselves of getting return on their investment”. These definitions are in strict compliance with the agency theory. Alternatively, Solomon’s (2007: 14) definition of CG follows the stakeholders’ perspective by stating CG as a “system of checks and balances, both internal and external to companies, which ensures that companies discharge their accountability to all their stakeholders and act in a socially responsible way.” Resource dependency theory considers CG as a process of collecting valuable resources and developing outside networking for the benefits of the organization (Voordeckers et al. 2007). In stewardship theory managers are loyal stewards of resources assigned to them and can be reliable to maximize returns for shareholders (Donaldson 1990).
