Corporate governance is the cornerstone of how corporations are managed. The board’s function as the entity with ultimate responsibility for the business is one of eleven items listed as "how businesses are directed and controlled led."

Governance has to do with the makeup of the board and how it functions. It includes questions regarding the makeup and organization of the board, its mandate and methods of operation, and the framework for the board’s accountability to its stakeholders. It also has to do with how the board distributes power to run the company as a whole.

Elements of Good Corporate Governance
A formal structure of accountability and control for morally and socially responsible choices and resource utilization is known as good corporate governance.

The main elements of good corporate governance are:

- Participatory
- Consensus Oriented
- Accountable
- Transparent
- Responsive
- Effective and Efficient
- Equitable
- Inclusive and
- Follows the Rule of Law.

Another important part of governance is business ethics, which involves bringing moral or ethical standards into the workplace, helping not just the board, but the entire workforce to align with common moral obligations that drive the company forward.

But how do these guidelines affect the business?
Here is why companies that have a strong commitment to ethical behaviour routinely perform better than those that don’t:

1. Talent Attraction and Retention
People want to work for companies with excellent communication flow and mutual respect, and companies that drive these will be the ones that draw in the best talents and retain them.

Once the ethical climate is supportive of the employees, it breeds trust and makes employees willing to rely on taking decisions and acting on the decisions and actions of co-employees.

3. Customer Contentment
Business success depends on customers placing repeat orders or purchases as well as on long-lasting, respectful relationships.

For a business to be successful over the long term, its name should inspire clients' respect and trust.

But this cannot be achieved when employees who would directly relate with customers are not treated right.

Any crisis or mishap in the customer success route is seen by the clients as an expression of what the company is on the inside.

Finally, while the board of directors see to it that a code of ethics is created, everything company employees do show what the company aligns with. That’s why leaders must always present themselves as worthy of emulation, especially to enforce discipline whenever necessary.