Like every aspect of management, even corporate governance has a certain set of principles. We need principles to make sure that the integrity and the efficiency of the processes are maintained in a way there is no sense of ambiguity and miscommunication is avoided at all times. Principles are what make an organization’s foundation strong enough to support growth and revolution.
Let us look at a few of the principles one by one-
Accountability: working in a corporation means that you have to be answerable for your actions, individually as well as, as an entire organization. A company is obligated to give an explanation or justify its actions and the way its employees conduct themselves. In this case, the board has a major role to play as the board is what represents the organization and is the face of your company. The board should be able to present a balanced and realistic assessment of the company’s current state in terms of what it has already achieved and what its future goals and prospects are. This assessment should be understandable and unambiguous. As an organization there are a lot of risks that need to be taken in order to move onwards and upwards. But, we need to choose your battles carefully. Therefore, the board is responsible for deciding what risks the company is willing to take and up to what extent and what risks need to be avoided at all costs. Hand in hand with risk comes the process of risk management which also needs to be outlined by the board. Stakeholders and auditors should be communicated with suitably and at regular intervals.
Fairness: equal treatment and equal rights is what leads to a flourishing workplace. Shareholders and stakeholders should be given equal consideration for whatever stakes they hold in the organization. This includes employees, communities and public officials. Fairness promotes transparency and sense of loyalty and belonging.
Transparency: all stakeholders must be kept in the loop regarding what is going on in the organization- current status, future plans and plausible risks involved. Awareness and openness is important to nurture a feeling of being a part of the same big picture and working towards achieving the same goal.
Responsibility: the board must be responsible with the amount of authority it has, after all, with great power comes great responsibility. The best interests of the company should dictate the boards actions and it should be able to accept full responsibility for whatever happens- good or bad. Accountability and responsibility go hand in hand.
With software tools like VComply, all this becomes easier to follow and implement as you know what happens in your organization all the time. Keeping tabs becomes much easier. It promotes transparency as everyone in the team knows what you are doing and how well you are doing it which automatically invokes a sense of responsibility and accountability for your actions. Since everyone is kept in the loop, there is no scope for any sort of partiality and therefore fairness is ensured.
An organization with these principles at its core is sure to outrun its competitors in the race to be the best out of all.
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