Corporate governance is one of the cornerstones of any good business. Why?

Let’s define first what is corporate governance. It is the framework that defines the business
relationships that exist between company shareholders, management teams, the Board of
directors, and all other key stakeholders. Good corporate governance ensures that an
organization’s board of directors meet regularly, retain control over the business and have
clearly defined responsibilities. In short, it’s how the BOD manages the company in order to
give protection to the interest of the shareholders, government, and people.

Corporate governance encourages robust and effective decision-making through processes,

practices and policies. Moreover, it provides the first line of defense against any allegation of
malpractice or dereliction of corporate duty. In line with these, companies create audit
committee and hire interlocking directors even if it’s costly and the purpose of this is to look at
the company’s welfare, avoid the abuse of power by the BOD for the interest of the entire
stakeholders while internal audit committee look at company’s internal control if it’s strong or
not and if a company’s performance is in compliance with best policy and law and if the BOD is
giving the right directions according to the company’s vision and mission.

Given these pressures and the competitive global economy, corporate governance is becoming
an increasingly important part of corporate strategies. It maintains investors’ confidence,
whose support can help to finance further growth. Companies who implement the principles of
good corporate governance into working environment life will ensure corporate success and
economic growth. They are the basis on which companies can grow. 

Employing good corporate governance not only lowers the risk of non-compliance with
statutory and regulatory obligations, it helps a company discourage or counter charges or
assumptions that it’s not progressive or open-minded. Sound corporate governance policies
and practices can lead to corporate diversity, green credentials, fair supply chains and other
outcomes that today’s investors value. As a result, corporate governance can be a significant
business differentiator.