**4. Essence of corporate governance**

OECD [5] notes that CG functions as a structure that protects the confidence of investors, advance capital market access and acceptance, and enhance the economic development of an organization. By explicitly postulation the operational mode and compliance checks for approved activities, the CG system decreases the operational cost and advance economic interest. The above makes CG essential, advantageous and practical for all forms and sector of an organization (i.e. multinationals, state-owned enterprises, domestic organizations, family-owned firms, and small businesses).

Notwithstanding the disparity in nations operation of CG with regards to the institutional, regulatory and legal environment, they possess a common aim; to define the rights, responsibilities and behaviors that are required of an organization's owners (the 'principals') and managers (the 'agents') for the business to operate successfully. Owners' connotes any person(s) who possess equity (i.e. shares) in the organization. Manager encompasses any person mandated to oversee the affairs of an organization by the owners' or board of directors of the organization.

When breaches in CG happen, they may be systemic, resulting from the negligence of duty or actual sabotage by employees. Nonetheless, the presence of a systemic failure (i.e. a global economic crisis) usually denotes a misalignment in the interest of the owners' and management; and this, an effective CG structure should have addressed before escalation.
