The Organization of Effective Corporate Governance

Corporate governance is the establishment of rules, practices and procedures that govern a company. It also takes into account the interests of the shareholders, customers and employees and also the government, lenders and community. These are essential elements for a strong, thriving business.

The human element is crucial because it guarantees that all the people who work for the company are ethical, skilled, and committed to the goals of the company. This is particularly important at a time where 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 that the board receives complete financial reports every month that provide visibility into how the business has performed, and why. It is also recommended for boards to have a system of checks and balances to prevent fraud 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 presided director is an independent director who supervises and directs the board. This is an essential aspect of good corporate governance. This is particularly important when a board’s leadership structure is one that combines the roles of chair and CEO or where there are personal connections between the top leaders. The company must also ensure that its compensation practices don’t result in conflicts of interest among directors.

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