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Corporate governance is essential due to the divergence between ownership and control within a company. Shareholders seek to achieve their objectives, expecting directors to align their actions accordingly. However, directors may have differing goals, which can lead to conflicts. For instance, if directors receive bonuses tied to short-term profits, they might prioritize immediate gains over long-term shareholder value. This could involve cost-cutting measures that undermine future growth, such as reducing training or research and development. Thus, effective corporate governance practices are crucial to balance these interests and protect shareholder wealth over time.