Forests play a crucial role in the ecological and economic stability of nations, yet they face challenges due to their status as common property resources both subtractable and non-excludable. The trade in forest resources involves multiple stakeholders, including local communities, necessitating regulation for collective welfare. Unfortunately, unsustainable practices have resulted in ecological crises such as climate change and biodiversity loss, along with economic repercussions like the vulnerability of forest-dwelling communities and supply chain disruptions. Globally, community participation in forest management has proven effective for sustainable forestry, provided communities are empowered through integrated corporate governance. This approach aims to ensure sustainable trade in forest resources while improving local livelihoods. The chapter critically examines forest management issues such as deforestation and illegal logging driven by unsustainable practices, advocating for community involvement as a solution. Corporate governance, evolving to encompass community engagement and environmental sustainability, forms the theoretical foundation for integrating local communities as stakeholders in forest resource management. Successful case studies from various countries, as documented in SOFO 2022 and GFRA 2020, highlight instances where community integration in corporate governance has promoted sustainable forestry. In conclusion, integrating local communities into forest resource trade is crucial for mitigating degradation and addressing livelihood needs, aligning with India's Sustainable Development Goals (SDGs). This necessitates policy adjustments to foster community participation within corporate governance frameworks governing forest resource trading.