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Conceptual Framework of Corporate Governance
Conceptual Framework of Corporate Governance
Performing business operations do not only constitute profit and wealth but it also holds
certain duties and responsibilities which indicate the accountability of people concerned with the
business operations. Corporate governance does not only provide directive benefits as it is also a
system of feedback and control that uses regulations and standards ensuring people, within the
organization, are held accountable for securing the long-term satisfaction and benefit of
shareholders and stakeholders. The principles of corporate governance also command the
commitment of key players within the company which is necessary to properly and effectively
fulfil their accountabilities in the company’s operations.
Principle 4: To show full commitment to the company, the directors should
devote the time and attention necessary to properly and effectively perform
their duties and responsibilities, including sufficient time to be familiar with
the corporation’s business.
Apart from all that have been mentioned, corporate governance is a set of relationships
between a company's directors, its shareholders and other stakeholders. It establishes the
relevance of trust within and outside the premise of the company and how it can be achieved.
A principle necessitates the use of a mechanism for employee participation. This
employee participation could be the driving force in creating symbiotic environment which will
result in realization of corporate goals and participation in governance processes. Also, this
encourages better performance and taking on dynamic roles within the corporation. Moreover,
corporate governance impels the maintenance of communication channel for dissemination of
relevant information to stakeholders that will help in gaining their trust through transparency.
Principle 11: The Company should maintain a comprehensive and cost-
efficient communication channel for disseminating relevant information.
This channel is crucial for informed decision-making by investors,
stakeholders and other interested users.
Principle 15: A mechanism for employee participation should be developed
to create a symbiotic environment, realize the company’s goals and
participate in its corporate governance processes.
Transparency is one of the core principles of corporate governance. All the things that
encompass transparency ensure the protection of shareholders’ and stakeholders’ rights.
Corporate governance directs the establishment of disclosure policies and practices in
compliance with regulations and benchmark-worthy practices. It is not only important to make
comprehensive, timely reports but as well as create awareness for shareholders and stakeholders
on how the company and the people within it are being managed. In addition, it addresses the
need to provide communication channels which can help in disseminating information that are
relevant for stakeholders’ decision.
Principle 8: The company should establish corporate disclosure policies
and procedures that are practical and in accordance with best practices and
regulatory expectations.
Every company should not only strive to accomplish organizational objectives and goals
which lies on the role it plays in both internal and external stakeholders. Companies should also
make sure they achieve the point of sustainability, which is addressed by corporate governance,
and continuous operation. It directs the facilitation of adequate and effective internal control
system, enterprise risk management, and management policies which aid in sustaining safe and
sound operations to achieve corporate goals. Also, corporate governance ascertains the use of
positive and progressive manner in serving not just the stakeholders but also the environment in
which the company performs its operations. It also ensures to make emphasis on company’s
contribution in solving globally complex challenges alongside with government and society.
Principle 16: The company should be socially responsible in all its dealings
with the communities where it operates. It should ensure that its interactions
serve its environment and stakeholders in a positive and progressive
manner that is fully supportive of its comprehensive and balanced
development.