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In general terms, the principals of a corporation are the owners or investors, referred to as shareholders or stockholders. The agents of the corporation are generally considered to be the board of directors, officers or other persons the corporation authorizes to act on its behalf.
Corporate governance is the way a corporation polices itself. In short, it is a method of governing the company like a sovereign state, instating its own customs, policies and laws to its employees from the highest to the lowest levels.orporate governance is of paramount importance to a company and is almost as important as its primary business plan. When executed effectively, it can prevent corporate scandals, fraud and the civil and criminal liability of the company.