Corporate governance is the management of policies, rules, and procedures that guide an organization. It also takes into account the interests of shareholders, customers and employees as well as government, lenders and the community. These are essential elements for a flourishing, strong business.
The people aspect of good governance ensures that the people who are involved in a company’s operations are competent, ethical and dedicated to the company’s goals. This is especially important at a time where people are tired of corruption and is demanding more transparency, equity, and accountability.
Transparent reporting systems are an essential element of good corporate governance. This means that the board receives accurate financial reports on a monthly basis that give a clear picture of how the business has performed, and why. It is also a good idea for boards to have an established system of checks and balances to prevent fraud mergers and acquisitions and mismanagement.
Guidelines and policies are an additional important element of good corporate governance. They should reflect the company’s culture, align with legislation/regulations and internal policies, and be clearly available to all stakeholders.
A presiding director is an autonomous director who supervises and directs the board. This is an essential aspect of good corporate governance. This is especially important if the structure of the board leadership structure of a company combines the roles as chair and CEO, or if there are close personal connections among the top leadership. The company must also ensure that its compensation practices do not result in conflicts of interest among directors.
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