Governance is about the standards, rules and values through which management and directors supervise and control the organizations to add value for their stakeholders. Accountability and transparency drive governance. When accountability and transparency standards are weak then governance usually follows. Risk management is a fundamental requirement for effective performance management and high governance standards.
Worldwide Governance Indicators have been prepared by the World Bank Group for 215 countries over 1996-2012 using six basic components:
● Voice and Accountability
● Political Stability and Absence of Violence
● Government Effectiveness
● Regulatory Quality
● Rule of Law
● Control of Corruption
Scoring the corporate boards is just as difficult as scoring countries on their governance standards. Principles for good corporate governance have been revised regularly around the world following regulatory problems and major financial events including the global financial crisis. High quality corporate governance practices are now seen to underpin long-term company performance and that’s one reason the UK has encouraged companies in that country to comply with the UK Corporate Governance Code and integrated the Code into the overall regulatory framework.