Corporate governance is a framework that focuses on the concept that the activities of the financial manager performed on behalf of the company should be governed for compliance with the appropriate corporate laws and codes of ethics.
The managers and agents of the companies are given certain powers to perform actions on behalf of the company. Corporate governance provides certain sets of rules and guidelines that if complied with, will ensure that the company is performing ethically and legally as it should be.
To make sure this is happening the companies form a committee called the audit committee consisting of 3 or more non-executive directors, who are charged with governance and are responsible for ensuring compliance.
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