Corporate governance broadly refers to the mechanisms, processes and relations by which corporations are controlled and directed. Governance structures and principles identify the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders) and includes the rules and procedures for making decisions in corporate affairs. Corporate governance includes the processes through which corporations’ objectives are set and pursued in the context of the social, regulatory and market environment. Governance mechanisms include monitoring the actions, policies, practices, and decisions of corporations, their agents, and affected stakeholders. Corporate governance practices are affected by attempts to align the interests of stakeholders.
The general principles that make up a robust corporate governance framework include:
- Rights and equitable treatment of shareholders: Organisations should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by openly and effectively communicating information and by encouraging shareholders to participate in general meetings.
- Interests of other stakeholders: Organisations should recognise that they have legal, contractual, social, and market driven obligations to non-shareholder stakeholders, including employees, investors, creditors, suppliers, local communities, customers, and policy makers.
- Role and responsibilities of the board: The board needs sufficient relevant skills and understanding to review and challenge management performance. It also needs adequate size and appropriate levels of independence and commitment.
- Integrity and ethical behaviour: Integrity should be a fundamental requirement in choosing corporate officers and board members. Organisations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making.
- Disclosure and transparency: Organisations should clarify and make publicly known the roles and responsibilities of board and management to provide stakeholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company’s financial reporting. Disclosure of material matters concerning the organisation should be timely and balanced to ensure that all investors have access to clear, factual information.
As governance advisors we:
As governance advisors we can assist you in identifying and implementing an effective governance framework that best meets your individual circumstances and needs – helping you to drive enhanced organisational performance while at the same time aiding conformance with various requirements (e.g. the company’s constitution, policies, controls and procedures as well as with applicable external regulations and laws).
Our approach is to:
- assess an organisation’s governance system and identify areas for improved adding of value;
- suggest the appropriate alignment of the organisation with its strategic direction;
- recommend adoption of sound governance practices; and
- outline the core areas of Compliance.
This leads to an effective governance framework which would have appropriate regard to the:
- contribution of individual directors;
- effectiveness of the board and board performance;
- way in which governance is applied throughout the organisation;
- strength of the relationships the organisation fosters with its stakeholders.
We deliver our services through a partnership with Enterprise Care, utilising the proprietary Governance Intelligence® Framework, which has received endorsement from the Governance Institute of Australia.
Our reports are specifically tailored to your organisation and provide pragmatic recommendations that will support improved Board performance and provide positive outcomes for your organisation.