Corporate governance is the collection of policies, structures and procedures that companies employ to manage risk and ensure accountability. Its purpose is to provide a plan for long-term growth while decreasing the potential for financial losses, waste, risks and corruption.
Fairness, diversity and transparence are the core principles of corporate governance. These principles are derived from the notion that all stakeholders including employees and shareholders should be treated fairly and equally by the management and board. This means establishing and maintaining an official and transparent procedure to select, overseeing and monitoring important board members and executive performance and also ensuring that important executives’ and board compensation with the long-term interests, and providing the necessary oversight to prevent conflicts of conflicts of interest.
Transparency refers to being transparent and sharing accurate information with all stakeholders including shareholders. This includes the willingness of an organization to share both positive and negative news. This means sharing information frequently and making it readily available.
Depending on the company type, different boards and comittees can play a part in corporate governance. However, it is usually the duty of the board to set up and oversee a formal system for governance. This includes appointing a lead director or presiding director if the board structure is one where the CEO and chair are combined. It must be independent of the chair and serve for a time period determined by the board. The director who is the lead must also implement guidelines and policies for governance that are compatible with the legal, regulatory, and cultural environment of the company.
https://boardroomdirect.blog/board-governance-software-products-in-2022/
