Definition of Corporate Governance

The system of rules, practices and processes by which a company is directed and controlled. 

According to businessdictionary.com, The framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company's relationship with its all stakeholders which are financiers, customers, management, employees, government, and the community.

The corporate governance framework consists of explicit and implicit contracts between the company and the stakeholders for distribution of responsibilities, rights, and rewards, procedures for reconciling the sometimes conflicting interests of stakeholders.

Corporate governance consists of two elements:

1) The long term relationship which has to deal with checks and balances, incentives for manager and communications between management and investors

2) The transactional relationship which involves dealing with disclosure and authority.
     (applied-corporate-governance.com)

The corporate governance also have their own benefits such as:

• Good corporate governance ensures corporate success and economic growth.  
• Strong corporate governance maintains investors’ confidence, as a result of which, company can raise capital efficiently and effectively. 
• It lowers the capital cost.  
• It helps in brand formation and development(managementstudyguide.com)