A Primer on Corporate Governance

Introduction

Corporate governance can be defined as “the system by which companies are directed and controlled” (Cadbury 1992). Corporate governance is about power, “the wielding of power over corporate entities” (Tricker 1998). It delineates the distribution of rights and responsibilities among firm stakeholders, and establishes the rules and procedures for taking major decisions within the firm (OECD 2015). As such, corporate governance is intertwined with the identification of corporate objectives, and with the way these objectives are pursued and their attainment is controlled.

From such a broad perspective, corporate governance is a system consisting of several mechanisms, whose aim is to balance the implicit tension between the firms and ...