Corporate governance is the establishing of rules, practices, and procedures that guide a company. It also takes into account the interests of employees, customers and shareholders in addition to the lenders, government and community. These elements are essential for a successful and prosperous business.
The people read at scoreboardroom.com element of good governance assures that the people who are involved in a company’s operations are ethical, trustworthy and committed to the company’s objectives. This is particularly important in a period when people are tired of corruption and demands more transparency, equity, and accountability.
A transparent reporting system is a key element of good corporate governance. This includes ensuring a board receives a thorough financial report each month, which provide insight into the company’s performance and what it is doing to improve. It is also recommended that boards implement an accountability system to prevent fraud and inefficiency.
Guidelines and policies are also an crucial 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 presiding director is an independent director who oversees and guides the board. This is a key aspect of a good corporate governance. This is especially crucial in the event that a company’s board of directors structure combines the roles of CEO and chair or where there are personal connections among top leadership. The company must also ensure that its compensation practices don’t create conflicts of interest among directors.