Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled, balancing the interests of a company's many stakeholders. It encompasses the mechanisms that ensure accountability, fairness, and transparency in a company's relationship with its stakeholders, including shareholders, management, customers, suppliers, financiers, government, and the community.
Board effectiveness is crucial for ensuring that a company is well-governed, aligns with its strategic objectives, and fulfills its fiduciary responsibilities to stakeholders. It involves evaluating the board's composition, processes, and dynamics to optimize decision-making and accountability.