Dr. Hitesh N. Dave
Abstract
Corporate
governance refers to the structures, processes, and relationships that define
how a corporation is controlled and directed. At its core, it establishes a
framework based on established guidelines and principles aimed at ensuring that
the corporation is managed effectively and ethically. These principles guide
companies in achieving their objectives while operating within the constraints
of their social, regulatory, and market environments. The ultimate goal of
corporate governance is to ensure sustainable profit maximization, while also
safeguarding the interests of all stakeholders—shareholders, employees,
creditors, and the broader community. An essential aspect of corporate
governance is the distribution of rights and responsibilities among the various
participants involved in a company. These include the board of directors,
managers, shareholders, auditors, and regulators, among others. The governance
mechanism sets clear rules and procedures for decision-making processes,
ensuring transparency, accountability, and fairness. However, the failure of government
regulations and oversight mechanisms can severely undermine the effectiveness
of these governance structures. When government agencies fail to provide
adequate supervision or enforce regulations, it leads to mismanagement,
corruption, and a lack of accountability within corporate entities. This paper
examines the critical role of government in supporting corporate governance
systems and explores the consequences of regulatory failure. By analyzing case
studies of governance breakdowns, it underscores the importance of strong
government institutions in maintaining corporate accountability and protecting
the interests of all stakeholders involved.
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Published: June 2025 [Vol. 08, No. 06]