Final answer:
The three core participants in corporate governance are the shareholders, board of directors, and management. These elements interplay to direct and control a company, with the board serving as the primary governing body overseeing management.
Step-by-step explanation:
The three main participants in corporate governance are the shareholders, board of directors, and management. Corporate governance refers to the system by which companies are directed and controlled.
The board of directors, elected by the shareholders, is intended to be the primary governing body, exerting oversight over the company's executives and ensuring the company's management acts in the best interest of the shareholders.
A critical role of corporate governance is to provide safeguards against mismanagement and to ensure that the company adheres to legal and ethical standards.
Unfortunately, there are instances, such as the case with Lehman Brothers, where corporate governance failed to uphold these standards, leading to misrepresentation of the firm's financial condition to investors and other stakeholders.
While other parties such as labor unions, employees, and lending institutions do play roles in the broader scope of a company's ecosystem, they are not considered the core participants in corporate governance, which focuses on the relationship between shareholders, the board, and executive management.