What Is Corporate Governance? Its Role Explained

What is corporate governance?

Every company have certain rules and regulations that form the essence of the entity. It is the framework through which the company attains its objectives. Corporate governance is where the organisation has to uphold the interest of the stakeholders, management, customers, suppliers, financiers, government and the community. So, corporate governance is a balancing act. It is the art of controlling the organisation by taking care of the needs of the stakeholders.

Some companies hire corporate governance consultants who specialise in keeping the internal and external teams of the firm content. These people need to work in sync with the board of the directors of the company maintain the reputation of the organisation.

At the same time, these consultants receive immense support from the reputation management consultants who know how to keep the company moving in the direction of success.

Corporate Governance must encompass the following:

• The company as well as the board of directors’ performance
• The relationship between the employers and top management
• The assessment of the board of directors
• Directors’ membership and responsibilities
• The company’s code of ethics
• Communication between the board and the C-suites
• Contact with the external and internal teams such as stakeholders
  
  

What is good and bad corporate governance?

Good corporate governance is where the stakeholders, directors and officers are in sync. They believe that economic efficiency would assist in directing and managing the organisational needs. Some good corporate governance consultant’s role includes:

• Making the company’s corporate governance public
• Ensuring the company culture such as the vision, mission, values, work environment and recruitment practices meets corporate governance strategies
• Transparency means trust and accountability. It is crucial when it comes to corporate governance. The internal and external communication, e. the exchange of data, must be clear.

On the other hand, bad corporate governance cripples business operations. It could go against the company concerning reliability, integrity, etc. especially against the shareholders.

Also, it is because of these very poor corporate governance consultants that there is a rise in corruption in India. With no stringent norms in place, the stock market experiences fluctuations as well as offering limited liquidity and inadequate returns to the investors.

So, the companies then look up to reputation management consultants for damage control.

Some of the basic role that the corporate governance consultants should cover:

Conclusion:

Corporate governance is important if the organisation wants to stand out from its competitors if they want to earn accolades from the employers for their transparent behaviour within the organisation.

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Created on Nov 20th 2018 06:58. Viewed 477 times.

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