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Corporate Governance primarily focuses on the relationship between shareholders and senior management. This involves the structures and practices in place that govern how an organization is directed and controlled. The central tenet of corporate governance is to balance the interests of the various stakeholders in a company, which includes shareholders, management, customers, suppliers, financiers, government, and the community.

Effective corporate governance ensures that management acts in the best interests of shareholders, balancing decision-making with accountability, transparency, and ethical considerations. Shareholders are interested in ensuring that their investments grow, while senior management is responsible for making operational decisions that drive the company’s performance. Therefore, establishing a solid governance framework is crucial for aligning these interests and enhancing the overall effectiveness and sustainability of the organization.

While aspects such as competitive relationships, financial profitability, and regulatory compliance are important to corporate structure, they are often seen as components that operate within the broader framework of corporate governance rather than its primary focus.