Corporate governance has become a critical focus in the wake of numerous financial scandals that have rocked the business world. Effective corporate governance involves a set of mechanisms, processes, and relations by which corporations are controlled and directed. It encompasses the practices and policies that ensure accountability, fairness, and transparency in a company’s relationship with its stakeholders.

This article explores the role of corporate governance in preventing financial scandals, examining its key components, the impact of poor governance, and the strategies for strengthening governance practices to safeguard against unethical behavior and financial misconduct.

Corporate Governance: The Basics

Corporate governance is the system by which companies are directed and controlled.…