Governance and Corporate Governance Basics

Study Notes

Governance refers to the process of decision-making and the process by which decisions are implemented or not implemented.
It encompasses the systems, structures, and processes that shape the exercise of power and authority in an organization, institution, or society.

Corporate Governance: The system by which companies are directed and controlled, focusing on the relationships between stakeholders, management, and the board of directors.
Public Governance: The system of governance in the public sector, including government institutions, policies, and practices.
Global Governance: The system of governance at the global level, involving international institutions, agreements, and policies.

Accountability: The obligation of decision-makers to explain and justify their actions.
Transparency: The availability of information and clarity of decision-making processes.
Participation: The involvement of stakeholders in the decision-making process.
Responsiveness: The ability of decision-makers to respond to the needs and concerns of stakeholders.
Effectiveness: The ability of governance systems to achieve their intended goals and outcomes.

Hierarchical Model: A centralized, top-down approach to governance, where decision-making authority is concentrated at the top.
Decentralized Model: A distributed, bottom-up approach to governance, where decision-making authority is dispersed among stakeholders.
Participatory Model: A collaborative approach to governance, where stakeholders are involved in decision-making through partnerships and networks.

Legitimacy: The extent to which governance systems are based on the will of the people.
Inclusivity: The extent to which governance systems involve all stakeholders, including marginalized groups.
Justice: The extent to which governance systems promote fairness, equity, and human rights.
Sustainability: The extent to which governance systems prioritize long-term sustainability and environmental protection.

Corruption: The abuse of power and authority for personal gain.
Lack of Transparency: The lack of availability of information and clarity of decision-making processes.
Inequity: The unequal distribution of power and resources among stakeholders.
Globalization: The increasing complexity of governance systems in the face of global interconnectedness.

Governance involves decision-making and implementation processes within an organization, institution, or society.
It encompasses systems, structures, and processes that shape the exercise of power and authority.

Corporate Governance: directs and controls companies, focusing on stakeholder relationships, management, and board of directors.
Public Governance: involves government institutions, policies, and practices in the public sector.
Global Governance: concerns international institutions, agreements, and policies at the global level.

Accountability: obligation of decision-makers to explain and justify actions.
Transparency: availability of information and clarity of decision-making processes.
Participation: involvement of stakeholders in decision-making.
Responsiveness: ability of decision-makers to respond to stakeholder needs and concerns.
Effectiveness: ability of governance systems to achieve intended goals and outcomes.

Hierarchical Model: centralized, top-down approach with decision-making authority at the top.
Decentralized Model: distributed, bottom-up approach with dispersed decision-making authority.
Participatory Model: collaborative approach with stakeholders involved in decision-making through partnerships and networks.

Legitimacy: governance systems based on the will of the people.
Inclusivity: involvement of all stakeholders, including marginalized groups.
Justice: promotion of fairness, equity, and human rights.
Sustainability: prioritization of long-term sustainability and environmental protection.

Corruption: abuse of power and authority for personal gain.
Lack of Transparency: limited availability of information and unclear decision-making processes.
Inequity: unequal distribution of power and resources among stakeholders.
Globalization: increasing complexity of governance systems in the face of global interconnectedness.