It is increasingly recognised that the health of corporate entities has societal implications and that high ethical standards are necessary to ensure their accountability to society. In particular, it has become vital to set up firewalls against what has come to be termed as aggressive accounting practices that ultimately compromise the stake of shareholders in the corporate entity.
Today, corporate governance means much more than the conduct of business in accordance with shareholders’ desires, a statement attributed to Nobel laureate Milton Friedman. It has come to encompass systems by which business corporations are directed and controlled and thus takes into account not just the interests of shareholders but others who have a stake in the well-being of the corporate enterprise.