The success of a company is contingent on policies that satisfy the expectations and needs of stakeholders, investors and managers. Corporate governance is the basis for how companies design and implement their policies. In the age of changing demands and expectations, effective governance is more important than ever.
Corporate governance can only be effective when the values, culture and purpose of the company are clearly understood. It is also necessary to have systems in place that enable a company to recognize and limit risks prior to they occur. This includes the establishment of an ethical code, effective reporting channels, and regulating conflict of interests.
The board of directors has to ensure transparency, openness, and accountability to all external and internal stakeholders. The board is responsible for ensuring that the assets of the company are used in a way that generates long-term value to shareholders. This is achieved through an assessment process that involves identifying risks, developing strategies for managing risk and evaluating performance in relation to the objectives.
Boards should consider appointing an independent director who is the lead (also called the presiding Director) to ensure that they run their boards on their own. This is especially important when a company has the dual position of chair and CEO post. Boards should also include nonmanagement members in CEO evaluations, in the event that it is appropriate, and evaluate the overall performance of senior management.
The board should be able to regularly communicate with shareholders and other stakeholders on issues that affect the long-term value creation of the company, even if they are not necessarily in the position of directly influencing the corporate strategy or decision-making process. It should encourage shareholders who want to influence corporate decision-making to disclose their identity and ownership, if the federal securities law allows it.
0 comentário