Corporate governance encompasses the system of rules, practices, and processes directing and controlling companies. Key governance mechanisms include the Board of Directors (oversight and strategy), Audit Committee (financial reporting oversight), Code of Conduct (ethical standards), Internal Controls (fraud prevention), and Transparency (disclosure requirements). The Companies Act, 2013 mandates governance standards through Sections 178-182 and Schedules. Good governance ensures accountability, reduces agency costs, and protects stakeholder interests. The SEBI guidelines and ICAI standards require independent directors, audit committee composition, and mandatory disclosures. Regulatory bodies like SEBI and Ministry of Corporate Affairs enforce compliance. Practical application: Board meetings must follow proper procedures, decisions require documentation, and conflict of interest must be disclosed. Exam tip: Link governance mechanisms to fraud prevention and stakeholder protection; understand that good governance is a preventive control, not merely a compliance requirement.