Corporate governance is the set of practices, structures, and processes that companies employ to manage risk and ensure accountability. Its goal is to create a blueprint for long-term success while decreasing the potential for financial loss, waste, risks and corruption.

The primary guiding principles of corporate governance are fairness, diversity, and transparency. These principles are derived by the notion that management and the board must treat all stakeholders equally and fairly, including employees and shareholders. This includes establishing and sustaining an established and transparent process for selecting, supervising and monitoring key executive and board member performance and ensuring that top executives and board remuneration with the company’s long-term interests, and providing the necessary supervision to avoid conflicts of interests.

Transparency refers to being transparent and willing to share accurate information with all stakeholders including shareholders. This includes the ability www.boardroomdirect.blog/real-estate-data-room-and-its-functionality/ of an organisation to share positive and negative information. It also means publishing this information on regular basis and making it accessible.

Depending on the nature of the company the different boards and comittees can play a part in the corporate governance. However, it is typically the responsibility of the board to create and supervise a formal system of governance. If the structure of the board is a combination of the chair and CEO, this includes appointing the director who is the leader or presiding. It should be independent from the chair, and have on a specific time. The director who is the lead must also establish governance policies and procedures that are compatible with the regulatory, legal and cultural requirements of the business.