skip navigation
Markets By TradingView
  • Executive Interviews
  • Company Overviews
  • Reviews

Corporate governance: why corporate prop depends on it

Nii Ashalley

Nii Ashalley

The road map to corporate governance, behooves every corporate citizen to properly adhere to sound corporate protocol in order to be successful.

Daymond John, CEO of FUBU

Daymond John: Millennials lead in smart business technology

Pakistan road network

Pakistani economy cuts deficits in half in 2015

Motorola Moto 360 2nd generation

MOTO 360 2nd Generation review: A premium design

Corporate governance

Corporate governance is the practice of corporate regulations. It ensures every corporate citizen works in the best interest of all stakeholders besides making money. But, do corporations always adhere to governance regulations? According to a New York-based research data firm, only a third of the directors of Chinese companies are independent.

Usually, companies that want to comply with strict corporate governance principles develop a very strong board of directors. Each member within the board of directors is selected based on their background, strong ethics, integrity, skills set, etc.

These members have their defined roles and responsibilities. But, they are never given a right to participate in voting matters in which they have an interest. So yes, corporate governance will need strict adherence to rules, policies, and practices.

As for examples, we’ve companies that implemented corporate governance effectively and did very well. Nexen Inc. is one of them.

Nexen Inc. Corporate Governance Success

The year 2014 had many corporate success stories that clearly prove the importance of corporate governance. Take the example of Nexen Inc. It was a global oil and gas exploration company before it was purchased by CNOOC. The company was listed both in Toronto and New York Exchanges. In 2004 the company changed the regulatory mandates entirely to help the auditors and the board to have a better view of business activities and responsibilities.

They prepared road maps and calendars that included a complete checklist to provide to the board of directors throughout the year. It took intensive consultation and participation from all corporate divisions. The road maps and other documents were prepared in a way so that the company executive management and directors could get a clear idea of the appropriate agenda. Besides the board of directors and the management, the internal and external audit teams could also follow the workflow and keep an eye on the work updates.

The whole process proved to be very successful as it helped the company’s board to focus on essential business activities and other responsibilities it was supposed to carry out.

Ensuring Corporate Governance: What Works Best?

The principles of corporate governance ensure business success.

A recent study has revealed that the culture inside a company has a more influencing effect on the company’s success than its CEO. Corporate culture is definitely one important factor that can effectively protect the right of the employees and also the shareholders. Therefore, it works in favor of corporate governance principles.

A professor of leadership development at Harvard Business School, Rakesh Khurana, said “large-scale statistical studies have failed to find any direct causal link between CEOs and firm performance.” He added, “a corporation’s internal culture exerts a far greater longer-term influence on the company’s success.”

A second important aspect is financial reporting. When you build a company and work with investors, you’ll have to provide them reliable and transparent financial reporting. Despite maintaining a good corporate culture, if you can’t provide a transparent and clear picture of your finances to the shareholders, they won’t invest in your stock.

So you see, corporate governance is important if you want to improve your company’s market reputation and thus the popularity of the market share. Principles of corporate governance ensure corporate governance best practices.

Share:

Showcasing Leaders, Businesses & Innovative Technologies

Subscribe to our Newsletter

Nii Ashalley

Nii Ashalley

Nii Ashalley is the inspirational voice at The Business Frontal. His uplifting quotes, dubbed "Ashalleyistics", have encouraged many entrepreneurs, start-ups and leaders to achieve their maximum potential. He is a seasoned counselor, a life and business coach and an author of many call to action business articles.

More from Corporate Enterprise

 Corporate ladder: How to build an indestructible career

Corporate ladder: How to build an indestructible career

Corporate earnings strategies: learn from fiksu’s success

Corporate earnings strategies: learn from fiksu’s success

Corporate technology influences smart business decisions

Corporate technology influences smart business decisions

Corporate social responsibility fuels organizational growth

Corporate social responsibility fuels organizational growth

Corporate leadership: mastering the dos and don’ts

Corporate leadership: mastering the dos and don’ts

Corporate strategy must include creative culture

Corporate strategy must include creative culture

Corporate image needs to be preserved always

Corporate image needs to be preserved always

Showcasing Leaders, Businesses & Innovative Technologies

Subscribe to our Newsletter