Corporate governance is the structure, practices and processes businesses employ to ensure accountability and manage risk. Its aim is to provide the foundation for long-term success while decreasing the potential for financial losses, waste, risks and corruption.
The most fundamental principles of corporate governance are fairness, diversity and transparency. These principles are derived from the idea that all stakeholders, including shareholders and employees should be treated equally and equally by the board and management. This includes establishing and maintaining an appropriate and transparent process to select, overseeing and monitoring the key board members and executives’ performance and ensuring that key executives and board remuneration with the company’s overall objectives and providing the required oversight to prevent conflicts of conflict of interest.
Transparency is about being transparent and sharing accurate information with all stakeholders, including shareholders. This includes the company’s willingness to provide both good and bad information. This means sharing information frequently and making it easily accessible.
Depending on the type of business the different committees and boards may play a role in corporate governance. It is generally the duty of the board to set up and oversee a my link formal structure for governance. This includes appointing a lead director or director as the presiding director, if the structure is one in which the CEO and chair are combined. It should be independent from the chair and serve for a set term. The director who is the lead is responsible for implementing governance policies and procedures in line with the company’s legal, regulatory and cultural environment.