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Corporate Governance

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Islamic International Rating Agency’s (IIRA) Corporate Governance Rating evaluates an entity’s governance practices with respect to the relationships between management and the stakeholders and the extent to which they conform to the regulations and global ‘best practices’. IIRA’s Corporate Governance Rating (CGR) is an independent opinion on an organization’s commitment to excellence in its managerial practices.

Here is the definition of Corporate Governance by the Organization for Economic Co-operation and Development (OECD) and as adopted by the Basel Committee:

"Corporate Governance involves a set of relationships between an entity’s management, its board, its shareholders and other stakeholders. Corporate Governance also provides the structure through which the objectives of the entity are set, and the means of attaining those objectives and monitoring performance. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the entity and shareholders and should facilitate effective monitoring, thereby encouraging firms to use resources more efficiently.”

Generally, Corporate Governance involves the procedures for directing and controlling the organization, the processes for making corporate decisions, disclosing entity's financial and operational information, and the framework for monitoring management performance.

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