Corporate governance is a set of policies, structures and procedures that a business employs to manage risk and ensure accountability. Its goal to provide a roadmap for long-term success, while also reducing the chance of financial losses, waste, risks, and corruption.

The core guiding principles of corporate governance are fairness, diversity, and transparency. These principles are derived by the idea that the board and management must treat all stakeholders equally and fairly, including shareholders and staff. This includes establishing, maintaining and implementing a formal, transparent procedure to select and oversee critical board members and executive members’ performance. It also involves ensuring that the compensation of key executives as well as the board is aligned to the long-term interest of the business and providing the necessary supervision to avoid conflicts of interests.

Transparency is about being open and sharing accurate information with all stakeholders, including shareholders. This includes an organisation’s willingness to provide both good and bad news. It also implies publishing this information on regular basis and making it accessible.

Depending on the nature of the company the different boards and comittees can play a part in corporate governance. It is the responsibility of the www.boardroomdirect.blog board to establish and supervise a formal governance system. This includes appointing a lead or director who is the presiding one if the board structure is one in which the chair and CEO are merged. The director should be independent of chair and be appointed for a period set by the board. The director in charge must also implement the policies and procedures for governance that are in line with the legal, regulatory and corporate culture of the company.