The Organization of Effective Corporate Governance
The implementation of effective corporate governance involves the creation of guidelines, policies, rules and resolutions to encourage positive corporate behavior and a positive work culture. It mergers and acquisitions also shields companies from crises and risks to business such as corruption in leadership and cybersecurity threats. It includes contingency plans that aid companies in coping with these forces of business and emerge from the other side stronger and more resilient.
Corporate governance structures and practices vary according to the size of a company and industry, its ownership structure and jurisdiction. Despite their differing characteristics, these governance structures and practices must have a common goal: generating long-term value for shareholders. They should also provide flexibility to change and adapt their governance practices if needed in order to achieve this goal.
A company’s board of directors is charged with setting goals and objectives, appointing as well as overseeing senior management, and representing the interests of shareholders. Board members must be aware of their responsibilities and work with management to fulfill them in a way that supports the development of the business as well as financial performance.
Stakeholders should be urged to be involved in shareholder outreach and dialogue with the management and board of a company. This will allow them to make their views recognized in areas that traditionally, have fallen within the control of management and the board, such as strategic direction and decisions. When doing this it is crucial for the board and management to be transparent and open with stakeholders about their governance structures and procedures and the reasons behind using them.