06/03/2022
Corporate governance is the framework of rules, systems, practices, relationships and processes by which a company is directed and controlled and authority exercised. Corporate Governance refers to the way in which companies are governed and to what purpose. It identifies who has power and accountability, and who makes decisions.
Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies.
Corporate governance includes company's accountability to shareholders and other stakeholders such as employees, suppliers, customers and local community.
Corporate governance entails the areas of environmental awareness, ethical behavior, corporate strategy, compensation, and risk management. The basic principles of corporate governance are accountability, transparency, fairness, and responsibility.
Main points:
• Corporate governance is the structure of rules, practices, and processes used to direct and manage a company.
• A company's board of directors is the primary force influencing corporate governance.
• Bad corporate governance can cast doubt on a company's operations and its ultimate profitability.
• Corporate governance entails the areas of environmental awareness, ethical behavior, corporate strategy, compensation, and risk management.
• The basic principles of corporate governance are accountability, transparency, fairness, and responsibility.
Six Pillars of Good Corporate Governance:
√ Rules of law.
√ Moral integrity.
√ Transparency.
√ Participation.
√ Responsibility and accountability.
√ Effectiveness and efficiency.
The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company.
Governance helps you to always act in the best interests of the business. More specifically, it can improve the performance of your business, help it become more stable and productive, and unlock new opportunities. It can reduce risks, and enable faster and safer growth. It can also improve reputation and foster trust.
The benefit of having strong corporate governance is the ability to be strategically competitive and perform without risk of being ethically or legally exposed.
Contact us at Scribe Corporate Services for further information:
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Cell: +254 773 044611/ 20 2670008
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The leading worldwide governance institute - The Chartered Governance Institute
We champion good governance practices, provide qualifications, training and resources to members and governance professionals worldwide.
