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Corporate governance is essential due to the separation of ownership and control in businesses. Shareholders own the company and aim to meet their objectives, while directors have their own goals that may conflict with those of shareholders. For instance, if directors receive bonuses based on short-term profits, they might prioritize immediate financial gains over long-term shareholder wealth. This could lead to actions such as reducing investments in training or research and development, ultimately compromising the company's future success for current profitability. Therefore, effective corporate governance is crucial to align the interests of shareholders and directors and ensure sustainable business practices.