A thriving business is based on the principles of good corporate governance. It is a set of rules and systems that bring the interests of shareholders with the interests of other stakeholders such as employees, customers, and the company’s top executives. It also provides frameworks for internal control to ensure the accuracy of financial statements, protect assets, and comply with laws.
It is the board’s responsibility to approve corporate strategies that are intended to create sustainable value over the long term choose a CEO, and oversee management’s activities in operating the business, including allocating capital for growth as well as assessing and managing risks and setting the tone at the top for ethical conduct. review important performance indicators to discover gaps, weaknesses and opportunities. The board must also provide adequate transparency and accountability to demonstrate it is acting in the best interest of shareholders as a whole.
A strong board requires the support of an excellent executive team. Boards should be willing to collaborate with independent directors, consultants and governance experts to gain the knowledge and experience they require to be effective. Attending governance conferences networking with peers and industry leaders, and working together to share best practices and gain from their experiences are all feasible.
As the world shifts, so must our organizational frameworks. They need to be able to adapt to new trends and issues. A climate-related crisis, for example, should motivate companies adopt sustainability strategies, frameworks, and practices, and set emission reduction targets and monitor the progress. This includes informing stakeholders and shareholders on these changes quickly and also making reports accessible and providing enough information to explain and clarify any issues that might arise.
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