Corporate governance, as a framework, defines the business relationships existing between the shareholders, board of directors, management teams and other key stakeholders. A corporate governance expert Canada says that the development of the associated policies in corporate governance are enforceable and must be applied consistently.
The corporate governance expert Canada understands how challenging it is to implement excellent corporate governance. That is why that expert reveals the specific aspects and steps for corporate governance implementation in an organization.
According to the expert, the first step is to have a suitable board. The board must be diverse, competent, and balanced if the company hopes to achieve success via effective corporate governance. The company must aim to have directors who deeply understand the needs of the organization while being qualified and delivering a fresh perspective.
Secondly, reviewing the board regularly is critical. The board of directors’ composition can make or break the success of a company’s corporate governance. That is why examining the board regularly helps determine potential shortcomings, allowing them to make timely improvements while ensuring everything is on track.
Building a solid foundation for oversight is another critical step for achieving excellent corporate governance. The organization must develop a systematic foundation to establish, manage, monitor, and evaluate the board and management team’s roles and responsibilities. It is critical for the board to have management actions visible and available during key decision-making processes.
The corporate governance expert Canada suggests the importance of prioritizing risk management as part of the implementation. The internal control framework and risk management process must be conducive and effective to the business needs. Since disaster recovery plans are essential to business endeavors, keeping them up to date is also advantageous.
The next step is ensuring the reporting integrity. The organization should aim to set up protection throughout the reporting processes, including the company’s external audits. Transparency with the stakeholders should also be observed. The expert reveals that this is achieved by providing information regularly, be it in good times or bad times.
The corporate governance expert further emphasizes that integrity practices do not stop at reporting. The organizations must be consistent in promoting ethical behaviors and consult the shareholders about their concerns and interests regarding its integrity.
Lastly, the organization must have adequate disclosure, which refers to the related parties’ transaction disclosure. It may also involve other interests of the board of directors. The director’s external financial interests can even influence the decision-making.
The corporate governance expert Canada wants every person involved in the organization to understand the importance of taking the mentioned steps to help them gain accountability while establishing clarity in legal and ethical pitfalls and matters.
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