The implementation of effective corporate governance involves establishing guidelines, policies, rules and resolutions that promote positive corporate behavior and work culture. It also protects organizations against crises and risks to business like corruption in the leadership and cybersecurity threats. It also includes contingency planning that helps companies cope with these forces of business and become stronger and more resilient.
Corporate governance structures and procedures are different depending on the company’s business, ownership structure, and jurisdiction. Despite their variations, these governance systems and practices must have a common goal: generating long-term value for shareholders. They should also be flexible enough to adapt their governance practices to achieve this purpose.
The company’s board of directors is charged with establishing strategic objectives, appointing and overseeing senior management, and representing the interests of shareholders. Board members must understand their responsibilities, and work with senior management to meet them in a way that helps the expansion of the business and financial performance.
Stakeholders should be encouraged to be involved in shareholder outreach and dialogue with the management and board of a company. They will be able express their opinions in areas that have traditionally been the management and the board the management, for example, strategic direction and making decisions. In doing this it is vital for management and the board to be transparent and open with stakeholders about their governance structures and practices as well as their motivations for using them.