Corporate Governance encompasses the entire mechanics of the functioning of a company and attempts to put in a system of checks and balances among the shareholders, the directors, the auditors and the management. It is the system by which the companies are directed and controlled (Cadbury Committee Report, 1992). The investors want assured returns on their investment which is possible only if the business is governed in an efficient manner, Corporate Governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment (Shleifer and Vishny, 1997). Corporate Governance is to conduct the business in accordance with the owner or the shareholders’ desires, which generally will be to make as much money as possible, while conforming to the basic rules of the society embodied in law and local customs (Milton Friedman). The aim is to align as nearly as possible the interests of individuals, corporations and society.
