The corporate sector today is expected to be thoroughly aware and conscious of its social, environment and economic responsibilities. This also calls for appropriate support through the means of a comprehensive corporate governance policy that streamlines the decision making processes towards responsible thinking and sustainability. Striving towards protection of shareholders' rights and which nowadays is fundamental for maximizing long-term gains of the company and its stakeholders, such a policy defines the reputation of the firm with its investors and society at large. Thus, a business responsible firm always adopt such a governance regime which helps in constantly benchmarking the business performances against highest industry standards.
Corporate Governance essentially consists of a set of policies and principles whose purpose is to make sure that the interests of all stakeholders are preserved. This active policy of corporate governance thus promotes corporate fairness, transparency and accountability. Taking cue from the SEBI, the Committee on Corporate Governance defines it as the "acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal & corporate funds in the management of a company."
A corporate board is entrusted with the task of deploying the principles of responsible business - integrate community development, ethics, stakeholder inclusiveness and environmental responsibility into business practices and operations. Further, it is the duty of the board to put an effective machinery at place to resolve conflicting interest as and when they arise.