115 CFA
File: Corporate Finance - Reading 31 - 1. Corporate Governance Overview

1. Corporate Governance Overview

a. describe corporate governance;

What is corporate governance?
- Corporate governance is "the system by which companies are directed and controlled."
- Also: "the system of internal controls and procedures by which individual companies are managed. It provides a framework that defines the rights, roles and responsibilities of various groups ... within an organization. At its core, corporate governance is the arrangement of checks, balances, and incentives a company needs in order to minimize and manage the conflicting interests between insiders and external shareowners."

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