Corporate governance in banks acquires additional significance as banks are highly leveraged finance entities that thrive on public trust. The Basel Committee underscores the need for banks to set strategies for their operations and insists them to establish accountability for executing these strategies.

The concept of corporate governance, which emerged as a response to corporate failures and widespread dissatisfaction with the way many corporates function, has become one of the wide and deep discussions across the globe recently. It primarily hinges on complete transparency, integrity and accountability of the management. There is also an increasingly greater focus on investor protection and public interest.

Governance is the process whereby people in power make decisions that create, destroy or maintain social systems, structures and processes. Corporate governance is therefore the process whereby people in power direct, monitor and lead corporations, and thereby either create, modify or destroy the structures and systems under which they operate. Corporate governors are both potential agents for change and also guardians of existing ways of working. As such, they are therefore a significant part of the fabric of our society.

Corporate governance has become an issue of worldwide importance. The corporation has a vital role to play in economic development and social progress. It is the engine of growth internationally, and increasingly responsible for providing employment, public and private services, goods and infrastructure. The efficiency and accountability of the corporation is now a matter of both private and public interest, and governance has thereby come to the head of the international agenda.

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