What defines corporate governance?

Corporate governance refers to a comprehensive framework that outlines how a company is directed and controlled, ensuring accountability and transparency in the organization. It encompasses the relationships between various stakeholders, including shareholders, management, the board of directors, and other entities involved in the company. Specifically, corporate governance includes the establishment of rules, practices, and processes to manage and operate the company effectively while adhering to legal and regulatory requirements. This structure helps protect the interests of shareholders and supports long-term strategic objectives.

The other options do not accurately capture the essence of corporate governance. Determining normal damages pertains to legal matters involving compensation for harm or injury, which falls under tort law rather than corporate governance. Practices related to tort cases specifically deal with civil wrongs and negligence issues, again not aligning with governance structures. Guidelines for ethical business conduct, while important, are part of the larger corporate governance picture but do not fully define how a company is controlled and operated.