Corporate governance is the process of making guidelines, policies, controls and resolutions to promote positive corporate culture and conduct. It also protects organisations against business threats and crises like cybersecurity threats, corruption of the leadership recessions in the economy, and political instabilities. It also includes contingency plans to assist companies in dealing with these business challenges and emerge from the other side stronger and more resilient.
Corporate governance structures and procedures are different depending on the company’s business, ownership structure, and jurisdiction. These governance structures and practices, despite their differences must all share the same objective: to create long-term value to shareholders. They should also allow flexibility to modify and adapt their governance procedures as needed to meet this goal.
The board of directors for a company is responsible for setting strategic objectives, appointing and overseeing senior management, and representing the interests of shareholders. Board members must understand their responsibilities, and work with management to meet them in a manner that aids the growth of the business and financial performance.
Stakeholders need to be encouraged to engage in dialogue and engagement with the board of directors and management. They will be able speak out in areas that have traditionally been the management and the board the management, like strategic direction and decisions. It is important that the board and management are honest and open about their governance practices and structures and the motivations for why they employ them.