Corporate governance is a complicated area of policy, practice and ethics that involves many stakeholders. It includes the structures and systems that ensure transparency, accountability and probity in company operations and reports. It encompasses the way boards oversee the executive management of an organization, and the selection, monitoring and evaluation of the CEO’s performances. It also includes the manner in which directors make financial decisions and report these to shareholders.

In the 1990s, corporate governance became a hot topic due to the implementation of structural reforms to build markets in former Soviet countries and the Asian Financial Crisis. The 2002 Enron incident, which was followed by a flurry of institutional shareholder activism and the 2008 financial crisis, heightened scrutiny. Corporate governance remains an ongoing topic with new pressures and new ideas constantly emerging.

The Anglo-Saxon or “shareholder primacy view” places the focus on shareholders. Shareholders elect a board of directors who direct management and establishes the strategic goals for the company. The board is accountable to select and assess the CEO, establish and oversee enterprise policies for risk management, and oversee the operations of the business. They also present reports on their stewardship to shareholders.

Effective corporate governance focuses on real estate data room four pillars such as integrity, transparency accountability and fairness. Integrity is a reflection of the ethical and responsible manner in which board members make decisions. Transparency is about openness and honesty as well as complete disclosure of information to all stakeholders. Fairness refers to how boards treat their employees and suppliers as well as customers. The responsibility of a board is how it interacts with its members and the community as a whole.