Characteristics of Good Corporate Governance


Corporate governance is the process in which culture, customs, policies, laws are directed and administered or controlled in order to     have an orderly and effective decision making process, as well as efficient implementation of the decision into proper action or practice.  In corporate governance mainly involves the internal relationships among the stakeholders who are mainly involved in the decision makings, along with the board of directors, executives, high ranking officials of the company; and most especially the ordinary employees in the   corporation.      In the contemporary corporate governance, aside from the internal stakeholders, there are other external factors which are also given serious consideration in the decision-making and implementation of the rules and policies of the organization; and they are the trade creditors, suppliers, customers as well as the communities, and the environment at large.  In this connection, there are many challenges that different companies hurdle as their business grow and develop.  Relatively these challenges are being resolved through massive demands of product innovation,   market shares and more than anything else is through customer satisfaction.  Based on the various studies, a life cycle of any business largely depends on the compliance of the organization to the main characteristics of good corporate governance.  A well developed corporation   has a   longer span of  existing in the  industry   compared to other  competitors who do not  acquire the  same characteristics.  (http://en.wikipedia.org/wiki/Corporate_governance)


 


Correspondingly, there are seven characteristics which corporate governance must have in order to succeed in the corporate world.  First, the corporation   ought to have discipline among its company’s senior management in adhering to the proper behavior that is generally recognized and accepted in the business world.  Along with this trait, the company should be aware also about the   strong commitment of each individual in the organization towards achieving principles of good corporate governance at the management level in the organization.  Second is the company should have transparency, which only shows from the outside how the company performs; as well as it also conveys strong reputation and analysis about its employees’ actions towards the economic growth of the company.   To measure a well-governed corporation is through making information     available   in an honest and precise manner for auditing, as well as general reports, and press releases.   A good governed corporation reflects what the investors and the employees do for the benefit of the company and its employees in particular.  If other people see that the employees of one company live a satisfactory and stable life in and outside the company.  It only shows that the company   and the employees enable to improve the condition of the business; as well as they able to make the organization profitable for the benefits of all the people who wok for the best of the company.  Third, the   company should be independent with its operational and management mechanisms in controlling and running the organization as well as the employees.    These management mechanisms must not be influenced by both internal and external factors such as the strong dominance of chief executive who has a largest share owned.  The composition of the board, the appointments to committees of the board, as well as the auditors should not mingle with the daily decision making in the management level to avoid arising of conflict of interests among the involved parties in the business.  Unless, there is a real need for their    opinion,   suggestion or approval.  Fourth, there must be accountability in the corporation, whatever decisions or actions by the board and the committee should take place, the concern individuals or group of individuals in a company should be accountable or responsible for their decisions and implementations.     In the same manner, rules and mechanisms should be followed   to allow accountability in the process.  Fifth, there must be fairness in the corporate system,   the rights of the various groups of employees in the organization must be respected and acknowledged.  The minority’s well being should be given equal consideration like those of the dominant shareholders of the company.  Sixth, a good governance company should know or aware about its social responsibility to the society at large.  The company should recognize the moral values and ethical standards that a good corporate citizen should act or practice in the working place without discrimination among its employees; as well as no form of exploitation.  Seventh,   there must be a high sense of responsibility with regard to protecting the human rights issues as well as protecting the environment at large.   Subsequently, if all companies   are  managing their organizations  with all  these 7  characteristics,  rest assured that   all companies in the  across the countries would   gain economic benefits and profits, as well as many businesses would be more productive and even  lifts up the  existing reputation of the corporation. 


(http://www.swview.org/blog/seven-characteristics-corporate-governance)


 


References:


 (http://en.wikipedia.org/wiki/Corporate_governance)


(http://www.swview.org/blog/seven-characteristics-corporate-governance)


 


 



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