REFLECTION: CORPORATE GOVERNANCE

CBN Code of Corporate Governance defines that “Corporate Governance is

therefore about building credibility, ensuring transparency and accountability as well as
maintaining an effective channel of information disclosure that would foster good
corporate performance.” Corporate governance is very vital within a corporation for kit
brings unison and uniformity in its management. It is gaining importance because as it
is simply put by GARP, “Doing the right things for the organization and doing things the
right way independent of personal interests.” It ensures good performance of the
organization, proper accountability to all stakeholders, and mitigation of conflicts of
interest. Without corporate governance employees might do thing the way they wanted
it and for sure, chaos will follow within the management. If a company has good
corporate governance, it will certainly attract investments from global investors.

Good corporate governance has major elements. These are role and powers of
Board, Legislation, Management environment, Board skills, Board appointments, Board
induction and training, Board independence, Board meetings, code of conduct, strategy
setting, business and community obligations, financial and operational reporting,
monitoring the Board performance, audit committees, and risk management. The board
is the primary direct stakeholder influencing corporate governance. Every decision they
make is a vital step towards the success of a company. That is why most of the elements
of good corporate governance comprise of the Board. A good corporate governance
could be reflected in quality financial statements reported and audited in good faith, and
also in good risk management application.

Among the principles from the Code of Corporate Governance for Publicly Listed
Companies, I believe the 15th principle will create most difference in the performance of
an organization. This principle stated, “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.” Employees are the assets of a
company. A company must take care of its employees to motivate them in doing their
jobs right for the sake of the company. The company must ensure that employees take
part in developing a good corporate governance of a company. They must be aware of
the goal’s the company must achieve to make them realize what they are working for.

According to insights.diligent.com, “The CEO is the top decision-maker for the

company and the person who oversees the daily operations and logistics. All of the
senior management executives report to the CEO,” while “the board chairperson of a
company is the head of its board of directors.” The chairperson is higher in rank than of
a CEO. I would prefer that the position of a CEO and Chairperson must be handled by
two different persons. Why? First, having one person to handle the two positions or
having the two positions combined as one will lead to subjective decisions by the person
handling the said positions. Since he is the chairperson and CEO, as well, he has the
right to implement whatever he wants to the company because he has the power to. it
would certainly lead to conflict of interest between the two positions. It is also much
burden to work for a job played by two persons. And the most important thing is, the
state of the company lies in the hands of these two positions. The job of the chairman of
the board is to look out for the shareholders while a CEO's job is to manage, and to
report to the board. Every decision they make could lead to success or failure for the
company.

The most unforgettable learning I got from this lesson that will help me achieve
my goal is simply how corporate governance is important for a company. Like how
corporate governance builds credibility, ensures transparency and accountability as well
as maintains an effective channel of information disclosure that would foster good
corporate performance, self-governance (as I put it like self-accountability) can help me
build my dreams and ensure my success in the future. I am accountable for whatever
happens in my life. Every action I take will reap consequences it deserves. So if I want
people to “invest” in me as a trustworthy person, I must make myself commendable in
return of their “investments”.