Importance of Solid Corporate Governance

Topics: Corporate governance, Corporation, Management Pages: 2 (546 words) Published: May 8, 2013
Corporate governance is the process in which a company controls its overall processes. It is a fine tuned method of handling the corporation like an actual country with its own laws and policies. A sovereign state with it its own customs, rules and regulations. These policies that is applicable from the highst to the lowest rank in office. The goal of corporate governance is the increased accountability of the company and acts as a preventative measure for any corporate disaster. A solid corporate governance is of utmost importance and it should act as a an internal affairs unit of the police department who handles and removes problems with extreme measures. Meetings with internal members must be held to address the needs of the affected parties. Internal members are the shareholders and debtholders- as well as suppliers, customers and community leaders that have a major stake in the corporation.

Corporate governance adhere to several principles; shareholder recognition, stakeholder interests, clear outlining of board responsibilities, ethical behavior and business transparency.
First on the list is shareholder recognition that plays a vital role of maintaining stock price of a company. Most corporations tend to fall into a situation in which small shareholders with very minimal impact are often brushed aside in favor of the interests of the executive board and the majority shareholders. All shareholders whether it be the board or the minority, should have a voice and should be well-represented at general meetings.

Corporate governance should be aware of stakeholder interests. A positive relationship with the community and the press can be created if your company take its time in addressing concerns and request of non-shareholder stakeholders.

Board responsibilities must be clearly outlined to avoid confusion between the company and to the majority shareholders. It is imperative that all board members must share the same goals and vision for the...
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