Financial modelling terms explained


In finance, corporate governance refers to the laws, regulations, and practices that determine how a corporation manages its business, including the duties and responsibilities of the board of directors, management, and stockholders

What is Governance?

Governance is the process by which a company's directors and officers are held accountable to its shareholders. Corporate governance is the system of rules and practices by which a company is directed and controlled. Corporate governance is important to shareholders because it determines how the company is managed and how its assets are used. Corporate governance also affects a company's risk profile and its ability to create value for shareholders.

There are three key elements of corporate governance:

1. Board of directors2. Executive management3. Shareholders

The board of directors is responsible for setting the company's strategic direction and overseeing the management of its affairs. The board is composed of independent directors who are not affiliated with the company, its management, or its shareholders. The executive management is responsible for implementing the company's strategy and managing its day-to-day operations. Executive management is answerable to the board of directors. Shareholders are the owners of the company and have the right to vote on matters affecting the company. They also have the right to receive information about the company's financial and operating performance.

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