Good corporate governance practice would assist the corporate in developing a credible opinion on its management quality and responsiveness towards the interest of all its financial stakeholders. Improved perception of investors, may in turn, influence its valuation and facilitate rising of funds at favorable terms. Corporate governance practices in the financial sector also improve the comfort level of the statutory authorities and regulators. It is used as a check to determine the position of the company with regard to the best practices in the industry.

In the last few years, the subject of corporate governance has come to the forefront. The governance mechanism in each country and corporate is shaped by various factors like political, economic and social history, legal framework, values and ethics of the promotes, managerial practices, etc. Business entities, banks, corporations, and financial institutions across the world are increasingly relying on corporate governance as the means to achieve the highest standards and to raise the confidence level of the people. The terms `corporate governance' is new part of common parlance but its usage has not been very consistent, as the corporates have assimilated the concept in their own way, based on their values and ethics. To develop a believable opinion on corporate governance, management quality and responsiveness towards the interest of all its financial stakeholders are needed to assist the corporate. Corporate governance practices in the financial sector also improve the comfort level of the statutory authorities and regulators. It can also be used as a check to determine the relative standing of the company, with respect to the benchmarks of the best corporate practices in the industry. Such practices alone can help the corporates to survive in the globalized era.

It is a system of making management accountable to the stakeholders for effective management of the companies, in the interests of the company and also with adequate concern for ethics and values. Corporate governance is a process and set of system to ensure that a company is serving for the best interests of all the stakeholders. It includes the systems, structures and process cultures through which the company monitors its performance.

If the organization cares for the customers (provides products at the right price and right type of quality), then the customers feel happy. Employee's happiness comes from the proper remuneration for their contributions. Suppliers feel happy, if payments are made in time and there is transparency and honesty in the organization in dealing with suppliers. Society feels happy, if organization is eco-friendly and is not polluting the environment. Government feels happy, if the organization pays its taxes honestly. Shareholders feel happy, if they get `proper' return on their capital. Thus, a good corporate citizen has to strive to keep everyone associated in a satisfied state.

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