Fundamental Concept of Corporate Governance Good Governance and Bad Governance Governance will always be challenged. Governance is everywhere. Governance in upper management must be the governance in to lower level. You can't say this thing and do other thing. The Three Lines of Defense Model (Corporate) 1st Line of Defense 2nd Line of Defense 3rd Line of Defense Recitation: Governance is an interaction between formal institutions and civil society. It is a use of power, authority and influence by the members of society and influences the choices that affects public life and societal progress.