Corporate governance is an established set of rules, procedures, and practices that businesses use to manage themselves. The framework of governance establishes the checks-and-balances that keep companies accountable to their shareholders, employees and other stakeholders.

Different corporate governance models are in use in contemporary business and each has its own unique impact on the overall efficiency of a business. Certain governance systems focus more on the stock market, whereas others focus more on the company's customers or its employees.

The primary responsibility of the board is setting the company's strategy over the long term, and making sure that the company is in the compliance with ethical and legal standards. The board is also responsible for overseeing management, including the CEO. All directors must be involved and prepared for board meetings.

A structure for committees that is efficient allows the board to study and discuss issues in greater depth than is possible to do during full-board meetings. The board should decide which committees will be responsible for which functions and who will be a part of each committee.

The management structure of a business must be fair to all shareholders. This means avoiding decisions which favor one shareholder group over the other. Also, it means treating suppliers, vendors and communities fairly.

The role of the board in corporate governance is different depending on the industry and the country. In the United States for example, the Securities and Exchange Commission has created a set of best practice guidelines for board members in areas such ESG reporting and cyber security as well as governance structures. The SEC's requirements are enhanced by guidance from top universities worldwide for excellence in leadership and management.