According to Sir Adrian Cadbury (2003), “In its broadest sense, corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources.”
The four principles articulated by the OECD to governance make it very clear:
i. Accountability – to shareholders
ii. Responsibility – to stakeholders
iii. Transparency – in all actions
iv. Fairness – in treatment of shareholders.
During the last 15 years, a number of corporate scandals and frauds came into light, which included world.com, Enron, Lehman Brothers, Satyam, et. al. Similarly, corruption has become an issue of great importance as many corporates are alleged to have been involved into this unethical practice.
Along with CG one more term has been coined – Corporate terrorism, which refers to crimes committed to create more consumers, such as fraud, the spread of misleading propaganda and bribing politicians to pass bills that force people into becoming consumers.