Corporate governance
Corporate governance, which could be described in many ways, means a good, fair, transparent, by the rules understanding of management where responsibilities are well-defined and these basic rules are followed in a balanced working environment.
Corporate governance is a means to achieve corporate objectives, while delivering significant value to the corporation’s stakeholders.
The framework of governance can be structured as follows: Board structure and responsibilities, governance processes for control, organization structure and management style, management and control processes.
Corporate governance is about how decisions are made and anticipates development of well built risk management process, internal control system and risk-based internal audit approach. Internal control system, internal audit and risk management are basic requirements for corporate governance.
Corporate governance is necessary for:
- Institutional investors
- Competing capital markets
- Long term viability
- Operational performance
- Corporate identity
- Stakeholders pressure
- Widespread public attention
- Questionable business ethics
- Regulators
Scope of corporate governance
- Management, structure of management and personnel
- Objectives and product/service development
- Accounting, control and risk management
- Financial management
- Internal processes, product/service and technology
- Sales and marketing activities, market position and competitiveness
- Customers and suppliers
- Reliability and open communication
The Deloitte approach utilizes a framework to assist directors understand their corporate governance responsibilities and to assess the effectiveness of their governance processes within their organization.
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