Background and ContextOne of the main objectives of any business is profit maximization; Every organization wants to run a profitable and sustainable business while satisfying the needs of its customers. It wants to stand out and differentiate itself from its competitors while increasing its market share. However, when it comes to profit maximization prospects, every business must ensure that it adheres to a strict code of conduct, enforces internal controls, and abides by established rules and regulations. Corporate governance refers to such a system by which businesses are controlled and governed. It provides a set of guidelines and basic principles for compliance with regulations in the business environment, with activities conducted fairly and with integrity (Thomson, L. 2009). It ensures that the overall transactions and operations of a company are carried out ethically, with transparency and without ambiguity. In addition, it examines the management of the company and its effectiveness, management committees and relations with shareholders (FRC, 2011). In recent times, corporate governance has gained interest due to misleading and deceptive business practices. Companies falsify their financial disclosures in order to improve their profitability. In such transgression, many have fallen victim to accounting fraud and corporate scandals. Since the collapse of Enron and WorldCom, 2 of the biggest scandals in history, governing bodies around the world have taken a major stance in developing austere standards such as the Sarbanes-Oxley Act in the United States and the UK Corporate Governance Code. (Labaton, S. 2006). Furthermore, this strict enforcement has...... middle of paper ...... porous accounting scandals. Although the indices provide an overall score, individual variables must be examined. Other corporate governance mechanisms that serve as determinants are essential for measuring the effectiveness of the framework. Subsequently, the actions of management and the board of directors need to be carefully considered as they could be prone to fraud and embrace of risks in order to obtain higher remunerations. Segregation of duties should be ensured in terms of different board committees such as nominations, remuneration and audit. It is also worth considering whether the company structure operates collaboratively as a unit or not (Arguden, Y. 2010). Finally, the culture and control environment should be assessed to enable oversight of the company's internal operations, including the code of conduct and policies within the company...