Corporate governance is the system of rules, practices and
processes by which a company is directed and controlled…
Corporate Governance refers to the way in which companies are
governed and to what purpose. It identifies who has
power and accountability, and who makes decisions. It is, in
essence, a toolkit that enables management and the board to
deal more effectively with the challenges of running a company.
Corporate Governance ensures that businesses have appropriate
decision-making processes and controls in place so that the
interests of all stakeholders (shareholders, employees, suppliers, customers and the community) are balanced.
Governance at a corporate level includes the processes through which a company’s objectives are set and pursued in the context of the social, regulatory and market environment. It is concerned with practices and procedures for trying to make sure that a company is run in such a way that it achieves its objectives, while ensuring that stakeholders can have confidence that their trust in that company is well founded.
We believe that good governance is important as it provides the infrastructure to improve the quality of the decisions made by those who manage businesses. Good quality, ethical decision-making builds sustainable businesses and enables them to create long-term value more effectively.
Many companies operate in a state of barely controlled chaos. Founders and management are thinly stretched, trying to change the world with limited resources. Cash is tight, there are problems and risks at every turn, and it is often years before stability can be achieved.
As a consequence, the corporate governance of companies can be pretty challenging at times. Directors often need to play a more active role than traditional governance courses might recommend, and they need to continually work around the conflicts involved in having founder and investor representatives at the board table. To make matters worse Directors have a responsibility to comply with for instance the King 4 report though not at this moment legally compelled to do so legal practitioners and judges alike often take guidance from the King Report to expand on the Companies Act and Common Law.