Corporate Governance: A Conceptual Analysis

Abstract

According to the Chartered Institute of Corporate Governance, the term corporate governance is the system of rules, practices and processes by which a company is directed and controlled. Corporate Governance refers to the way in which companies are governed and to what purpose. It identifies who has power and accountability, and who makes decisions. It is, in essence, a toolkit that enables management and the board to deal more effectively with the challenges of running a company. Corporate governance ensures that businesses have appropriate decision-making processes and controls in place so that the interests of all stakeholders (shareholders, employees, suppliers, customers and the community) are balanced. Therefore, the aim of this paper is to provide a conceptual analysis of the term Corporate Governance. The paper further reviews the state of corporate governance in State-Owned Enterprises (SOEs) in Zambia. The paper uses traditional or narrative literature review as the methodology. The paper concludes that Corporate Governance has been a central issue in developing countries long before the recent spate of corporate scandals in advanced countries. The paper concludes that Corporate Governance gained tremendous importance due to economic liberalization and deregulation of industry and business. It is against this background that it has gained so much prominence in the running of State-Owned Enterprises. Keywords: Corporate Governance; Indicators of Corporate Governance; State-Owned Enterprises; SOEs, Zambia DOI: 10.7176/RJFA/14-17-05 Publication date: September 30 th 2023