ABSTRACT
This chapter outlines how the concept of governance evolved. In contrast to the management which is required in all forms of business organizations, the need for governance emerged only in joint stock companies. The separation of ownership and management was the necessity that gave birth to governance. In the initial years, corporate governance was sought to be ensured through honest, discreet and satisfied directors. But, controlling greed, avarice and apathy in human beings is easier legislated than ensured. The widespread misuse of company assets, insider trading and related party transactions resulted in the development of governance practices like, independent directors, audit committees, norms for information sharing and disclosure of related party transactions. As the companies grew in size and accumulated power and wealth, their responsibility to stakeholders as opposed to their sole accountability to shareholders was hotly debated. It took quite some timefor the popular wisdom to acknowledge the need for stakeholder accountability as a necessary condition for ensuring sustained wealth creation for shareholders.
