Context and backgroundOne of the main objectives of any company is profit maximization; every organization wants to run a profitable and sustainable business as well as meet the needs of its customers. It wants to make a mark and be differentiated among its competitors, while increasing the value of its market share. However, when it comes to profit maximization prospects, every company must ensure that it adheres to a strict code of conduct, applies internal controls and abides by established rules and regulations. Corporate governance refers to a system by which companies are controlled and governed. It provides a set of guidelines and fundamental principles for compliance with regulations in the business environment with activities carried out correctly and with integrity (Thomson, L. 2009). It checks that a company's overall transactions and operations are carried out ethically, with transparency and without ambiguity. Furthermore, it examines the company's management and its effectiveness, management committees and shareholder relations (FRC, 2011). In recent times, corporate governance has gained interest due to deceptive and misleading business practices. Businesses falsify the disclosure of their financial statements to improve profitability. In this transgression, many have fallen victim to accounting fraud and corporate scandals. After the collapse of Enron and WorldCom, two of the biggest scandals in history, government bodies around the world took a major position in developing austere standards such as the Sarbanes-Oxley Act in the United States and the Corporate Governance Code in United Kingdom (Labaton, S. 2006). Furthermore, this rigorous enforcement has... middle of the paper... porous accounting scandals. Although the indices provide an overall assessment, it is necessary to examine the individual variables. Other corporate governance mechanisms that serve as determinants are key to measuring the effectiveness of the framework. Next, the actions of management and the board of directors must be carefully considered as they may be subject to fraud and membership risks in order to secure higher compensation. Segregation of duties needs to be ascertained in terms of various board committees such as nominations, compensation and audit. It should also be taken into consideration whether the business structure works collaboratively as a unit or not (Arguden, Y. 2010). Finally, the culture and control environment should be evaluated in order to provide oversight of the company's internal operations, including the code of conduct and policies within.