Corporate governance is about the structures, practices and procedures that the company employs to ensure accountability and control risk. Its goal is to create a plan for long-term growth while minimizing the chance of financial loss, waste, risks and corruption.

The core guiding principles of corporate governance are fairness, diversity, and transparency. These principles stem from the notion that all stakeholders, including shareholders and employees are treated fairly and equally by the board and management. This means establishing and maintaining a formal and transparent process for selecting, overseeing and monitoring the key board members and executives’ performance, as well as ensuring that key executives and board remuneration with the long-term interests and providing the necessary supervision to avoid conflicts of interests.

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

Depending on the type of business the different https://boardroomdirect.blog/real-estate-data-room-and-its-functionality/ committees and boards may have a role in corporate governance. However, it’s usually the duty of the board to establish and supervise a formal system of governance. This includes appointing a lead or director who is the presiding one if the board structure is one where the chair and CEO are joined. It should be separate from the chair and serve for a set term. The director in charge is responsible for implementing governance policies and procedures in line with the corporate’s legal, regulatory and cultural environment.