corporate governance is the system of rules, practices and processes by which a company is directed and controlled. Corporate governance is the collection of mechanisms, processes and relations by which corporations are controlled and operated. Governance structures and principles identify the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders) and include. A literature review of corporate governance humera khan faculty of management sciences comsats institute of information technology islamabad abstract. Corporate governance is a broad term defines the methods, structure and the processes of a company in which the business and affairs of the company managed and directed. The term corporate governance came into vogue following the asian economic crisis in july 1997 and has since been bandied about quite frequently in the business press. Corporate governance deals with determining ways to take effective strategic decisions. It gives ultimate authority and complete responsibility to the board of directors. In todays market- oriented economy, the need for corporate governance arises. Also, efficiency as well as globalization are significant factors urging corporate governance. The framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a companys relationship with its all stakeholders (financiers, customers, management, employees, government, and the community). The corporate governance framework consists of (1) explicit and implicit contracts between the company and the stakeholders for distribution of. Corporate governance (cg) is one of the most talked about topics in business, indeed in society, today. In 1997, the east asian financial crisis saw the economies of thailand, indonesia, south korea, malaysia and the philippines crumble. This report has been developed on the basis of the fact finding study corporate governance lessons from the financial crisis that the steering group issued in february 2009. Its purpose is to further advance the steering groups action plan on corporate governance and the financial crisis. Of good corporate governance for all co mpanies, including smaller and unlisted companies. Corporate governance involves a set of relationships between a companys management, its board, its shareholders and other stakeholders.