# Corporate Governance

*Corporate Finance & M&A — Finicade finance glossary*

Corporate governance is the system of rules by which a company is directed and held accountable: board composition, pay, audit, shareholder voting.

Corporate governance is the system of rules and structures by which a company is directed and held accountable — board composition, executive pay, audit oversight, shareholder voting. It exists because of the agency problem: managers spend other people's money. Governance quality shows up in valuation, with dual-class shares and entrenched boards trading at persistent discounts.

**Also known as:** governance, board oversight, governance code

**Related terms:** [Agency Problem](https://finicade.com/glossary/agency-problem), [Shareholder Rights](https://finicade.com/glossary/shareholder-rights), [Independence](https://finicade.com/glossary/independence), [Activist Investor](https://finicade.com/glossary/activist-investor), [Poison Pill](https://finicade.com/glossary/poison-pill)

**Taught in:** Charter Climb — Corporate Structures & Governance

Source: https://finicade.com/glossary/corporate-governance