Corporate governance is fundamental to providing effective oversight

This impetus drives into a robust corporate engagement with an underlying governance which needs to handle the communication and technological disruption in business world in order to prevent any crisis that might occur due to any kind of changes. Having a solid modernized corporate governance is the key factor for a sustainable and evolving business.

Good corporate governance is fundamental to providing effective oversight. Corporate governance generally refers to the rules, processes and procedures used to manage the business of a company and to set the company’s objectives in the context of the economic, social, regulatory and market environment; and put mechanisms in place to monitor progress relating to these objectives.

The good corporate governance is all about being in the right path with the correct practices and procedures that needs to be deployed in order to ensure that a company is running in a way that achieves its objectives, with a robust corporate governance framework that will help the prevention of future wrongdoings and provide a fundamental comfort to the organization. Good governance is about doing the right thing to achieve a long-term viability and success of the business, improves top level decision-making processes and leads to better control environments.

Corporate governance is an important and critical issue for the prosperity of any company whether big, medium or even small. Corporate governance has become a priority not only for international and national policy-makers and lawmakers, but also for performance-oriented companies wishing to attract investors. It is worth noting that, although corporate governance is more complex in large listed companies - it is also quite important for small companies or generally, the unlisted ones, which dominate in the least developed countries.

The importance of good corporate governance must not be underestimated. There are numerous examples with corporations that neglected having set a corporate governance framework or had a poor or/and out of date management that drove the companies into a some kind of failure.
Management needs a solid governance framework to operate; a framework that defines the role of the board, delineates duties and overlooks the critical issues. To achieve good corporate governance, it must be ensured that the management identifies and assesses all potential risks which business may face. It’s all about creating a transparent set of principles, processes and controls which the interests of the board, stakeholders and management are aligned.

Even in family businesses where the roles might be a little be confused, having set a good governance framework helps to build a plan to agree on the individual roles and responsibilities of the family members within the business. Implementing policies and robust procedures with the installment of an open, high integrity culture will help a family business to achieve a top-notch level professional status.

Good governance is primarily about the people. The right governance structures and processes will help the right people but they are going to be worthless to the wrong people. Thus, identifying and having a group of right people is elementary and more important than a set of governance processes and structures.

All business activities are driven and effected by the people undertaking them, so ensuring that you have people with strong skills and a high degree of integrity will vitally contribute to good governance practices, as well as to the ultimate success of the company. Having a group of people who work well together and possess the relevant skills and experience, will help them understand, refine and achieve the organization’s objectives.

It plays substantial role for the companies to maintain a right path by setting a sustainable governance model by getting the necessary people to constitute the supervisory bodies (such as Board of Directors, Audit Committees etc.) as well as the upper and line management. This will assist the company to establish clear policies and understanding of accountabilities, develop relationship of trust and transparency between board and management and encourage a culture of strong ethical values, innovation and engagement.

There are many different models of governance and the one that a business decides to implement will likely be determined by a number of factors unique to its own circumstances. It’s important to articulate the vision and plan for the future in order to provide oversight, insight and foresight.

From any point of view, objectively or subjectively, having a good solid corporate governance is a must have vital necessity that will help any company or organization to shield its substance and maintain a going-concern status, as well as spread wings to fly to the road of success.