Corporate governance is a term referred to by MBA students and professionals who are concerned about an Enron-type corporate crisis. A corporate governance program seeks to balance the powers of shareholders, board of directors members and other players affecting the corporate structure. This balance is achieved through being proactive as opposed to simply being reactive.
Many scholars and business people have come up with creative and effective ways to deliver corporate governance solutions to small and large, public and private corporations. These solutions are attainable and will enhance both institutional investors' confidence through accurate financial disclosures and Board accountability.
The following list will aid in finding corporate governence solutions:
1. Develop a corporate governance program to ensure greater accountability and balance of power.
2. Affect the laws by being proactive.
3. Evaluate the corporation's controls throughout the process.
Use professionals to develop a corporate governance program
Corporate governance is striving for harmony between the corporate players in order to succeed in the corporation's mission. These players include the board of directors, management, shareholders, employees, regulatory participants and several other players. This balancing of powers, responsibilities and clear delineated checks and balances enhances investor confidence. A company with a professional corporate governance program is a company aimed toward success.
Participate in lawmaking panels and educational resources that affect your business
Lawmakers seek out corporate executives, shareholders and those affected by corporate fraud to educate them on the current corporate governance application. After Enron, WorldComm and the other newsworthy corporate accounting disasters, Congress and other regulating bodies increased their listening ears to corporate players.
U.S. Securities and Exchange Commission (SEC) events. Get to know the committee members in Congress who affect your business and maintain an open dialogue.
Learn how to evaluate what corporate controls are in place
Corporate controls and corporate governance compliance programs are conducted throughout the company. It is not a matter of writing more manuals and getting managements opinion. For best results, involve the entire company in the process. Be sensitive toward shareholder rights, and cautious about too much shareholder activism. Monitor corporate governance performance. Utilize corporate governance software to assist you in setting up your program.
- Find additional corporate governance information through auditors and other accounting professionals you work with on a regular basis.
