Corporate Governance has become increasingly important across all aspects of corporate life.  It influences corporate activity in accounting, marketing, employment, investment, production, pricing – in fact most aspects of a business.  It applies to all enterprises big and small, foreigner indigenous, and it is becoming a priority at national and international level due to globalisation of business.

Good Corporate Governance:

• Assists companies/enterprises to perform better commercially and socially,
• through structured communications and effective business practice.
• Facilitates the monitoring of corporate risk.
• Encourages the responsible use of company resources.
• Identifies issues before they become problems.
• Protects the interests of all stakeholders.
• Will ultimately enhance shareholder value.

Corporate governance involves not only compliance with laws and regulations but also extends to responsible business behaviour by the board, management, employees, and all others acting on behalf of the company/enterprise.  Those involved in corporate decision-making should be aware of, and consider, the consequences of their actions for all stakeholders in the business.

Good Corporate Governance is bases on four fundamental principles:

Integrity

High standards of honesty and integrity are the cornerstone of reputation – a most important business asset and key to survival and prosperity. Integrity implies the highest standards of corporate conduct, and avoiding behaviour and practices that may damage the company’s reputation. 

Confidentiality

All business transactions conducted by the enterprise should remain confidential. Exceptions may be made only if required by law, or with the authorisation of the party affected by such information, such as a customer, supplier, or employee.

Compliance

Good corporate governance requires compliance with all relevant laws, as a matter of course. Being compliant with legal obligations is a fundamental necessity for all companies/enterprises. Legal obligations are requirements, which if not honoured may result in the company being unable to function legitimately.  However, best practice companies go beyond minimal legal compliance in their practices. This involves voluntary actions that demonstrate a commitment to high standards of conduct, even if not legally required, along with an awareness of the well-being of all stakeholders. Such best practices build trust and establish a company’s good reputation, so that customers, suppliers, shareholders etc. choose to do business with such a company.

Accountability

Companies, through their management, have a responsibility to be accountable principally to shareholders.  Accountability, however, should also be part of a company’s responsibility to other stakeholders, such as employees, customers, suppliers and local communities.

The following governance and ethical codes should form the basis of a company’s corporate and social responsibilities.

Management Structures and Obligations

Companies should ensure that:

• There is a clearly defined role for the company’s Board of Directors and for administrative management.
• Organisational structures are in place with transparent recruitment, promotion, retention, replacement and termination procedures.
• Directors are made aware of their core duties and obligations. 

Internal Control and Risk Management

Companies/Enterprises should:

• Identify, assess and manage the significant risks to the business.
•  Adopt clear accounting policies and procedures.
• Carry out regular reviews of such policies to ensure they satisfy company and regulatory compliance obligations. 

Staff Relations

Companies/Enterprises should ensure that the workplace:

• Provides for a work environment that caters for the well being and potential of all its staff.
• Is free of discrimination.
• Does not tolerate bullying or harassment  in any form.
• Safeguards all personal information about employees.
• Reflects economic and societal changes, and to that end encourages diversity as far as is practicable. 

Health and Safety

Companies/Enterprises should develop good health and safety standards to ensure

• Due regard for the health and safety for all staff, management, visitors etc.
• Compliance with relevant legislation.
• Prevention of health and safety risks in the workplace.
• Communication with staff and relevant stakeholders. 

Environment

Companies/Enterprises should

• Ensure compliance with all relevant environmental legislation.
• Ensure that their activities are not harmful to the natural environment.
• Adopt pro-active environmental management policies.
• Promote waste management and waste recycling schemes. 

Competition

Companies/Enterprises should:

• Be aware of what amounts to anti-competitive behaviour.
• Avoid engaging in, or encouraging, or promoting directly or indirectly activities within the marketplace that damage competitiveness such as price fixing, market manipulation or abuse of a dominant position.

Call Jordan Business Systems today and establish the status of your Corporate Governance