Organization of effective corporate governance is a key element of a flourishing business. It is a set rules and systems that ensure that the interests of shareholders are aligned with those of other stakeholders like employees customers, employees, and the company’s executives. It also establishes internal controls frameworks to ensure the accuracy of financial statements, protect assets and comply with laws and regulations.
It is the board’s responsibility to approve corporate strategies which are designed to generate sustainable long-term value Choose a CEO and oversee management’s activities in operating the company, which includes the allocation of capital for growth while assessing and managing risk and setting the tone at the top for ethical conduct; and examine the key performance indicators to find the weaknesses, gaps and opportunities. The board should be able to provide sufficient transparency and accountability to demonstrate that it’s acting in the best interests of shareholders as a whole.
A strong board needs the support of a great executive team. Boards must be willing to work with independent directors, governance experts and consultants to gain the expertise and knowledge they need to succeed. Attending governance conferences, networking with peers and industry leaders and working together to discuss best practices and learn from their experience are all feasible.
As the world around us evolves the way we live, so should our organizational frameworks adjust to new trends and issues. A climate change-related crisis, for example should spur companies to adopt sustainability frameworks, practices, and set emission reduction targets and monitor the progress. This includes communicating with stakeholders and shareholders on these changes promptly and providing reports that are accessible and sufficient information to clarify any issues that might arise.
