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hi there let's take a quick look at what's meant by the context of corporate governance what corporate governance is all about how businesses and in particular companies private limited or public limited companies are run how they're directed and controlled and it's an important concept particularly for companies because of a concept called the divorce between ownership and control we've looked at this in a separate video what this means is that companies are controlled by the Board of Directors by the senior management and they may also be shareholders but in many situations particularly larger complex businesses there are many many shareholders who have no involvement in the day-to-day running or control of the business but they are still owners of the business therefore the board of directors have a duty of care a duty to act in the interests of shareholders and this is why the concept of corporate governance is so important and it's why there are various processes in place to try and make sure it happens effectively now corporate governance is the responsibility of the Board of Directors it's one of their tasks so that they can fulfill this duty to the shareholders and there are various legal requirements in particular for board of directors to to comply with the shareholders who of course appoint the directors appoint the board just need to make sure that they're satisfied that the corporate governance rules the processes are in place and that they're acceptable so what are these key responsibilities of Directors in a system of corporate governance well clearly they're responsible for setting the direction and the objectives of the business the aims and objectives a key part of strategies to do that and then to decide and to Dermott to determine the most appropriate strategy to achieve those aims and objectives part of that of course is then providing the leadership for the entire organization to try to make the strategy effective and to supervise management so within the hierarchy there'll be different layers of management from senior through middle management and possibly down to junior management and the directors are responsible for supervising the managers they put in place of the business and finally of course a key part of the directors role is then to report to shareholders on how they're doing both the financial position of the business the performance of the business but also other important aspects of business operations that she also want to know about and that's how corporate governance works this is a more detailed series of points here that you probably don't need to know for your specification but it's if it's of interest to you you may need to know what may like to know that there are various rules and regulations in place in particular for public companies that set out what's known as best practice for corporate governance in particular splitting the role of the CEO who's the executive leader of the business and the Chairman who chairs the board of directors also importantly making sure that companies large companies have non-executive directors who are not involved in the day-to-day operation of the business and who are independent of the ball to act as the sort of the representatives if you like of the shareholders but there we go hopefully that's useful that's it's been an overview and an introduction to the concept of corporate governance