Corporate governance is the system by which companies are directed and controlled. It involves balancing the interests of various stakeholders and ensuring the company is well-managed. A company's board of directors plays a key role in influencing corporate governance through areas like strategy, compensation, risk management, and ensuring accountability, transparency, fairness, and responsibility. Good corporate governance follows principles like treating all shareholders equally and having a code of conduct for executives. One company that practices good governance is PepsiCo, which takes input from investors and focuses on issues like board composition, strategy, governance practices, and stakeholder engagement. Bad corporate governance can damage a company's operations and profitability.