Corporate governance is the organization of policies, rules and procedures that govern an organization. It also takes into account the interests of shareholders, customers and employees and also the government, lenders and the community. These aspects are crucial to a strong and thriving business.
The people aspect of good governance is to ensure that those who are involved in the business’s operations are competent, ethical and dedicated to the company’s goals. This is especially important at the time when people are fed up with corruption and are demanding more transparency, accountability, and equity.
Transparent reporting systems are an essential element of good corporate governance. This includes ensuring that boards receive thorough financial reports every month that provide visibility into how the business has performed, and why. It is also an excellent idea for boards to set up an accountability system to prevent fraud and poor management.
Guidelines and policies are also an essential to 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 presided director is an independent director who manages and supervises the board. This is an essential aspect of a good corporate governance. This is especially crucial if the structure of the board’s leadership an organization combines the roles as chair and CEO, or if there are personal ties between top management. The company must also ensure that its compensation policies don’t cause conflicts of interest between directors.
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