The Pillars of Good Corporate Governance (2024)

The pillars of successful corporate governance are: accountability, fairness, transparency, assurance, leadership and stakeholder management. All six are critical in successfully running a entity and forming solid professional relationships among its stakeholders which include board directors, managers, employees, customers, regulators and most importantly, shareholders.

• Accountability: Accountability embraces ownership of strategy and task required to attain organisational goals. This also means owing reward and risk in clear context of predetermined value proposition.. When the idea of accountability is approached with this positive outlook, people will be more open to it as a means to improve their performance. This applies from the staff all the way up to top leadership embracing Risk management within defined formal appetite for risk. This also include fostering culture of compliance to create real and perceived believe that the entity is operation within internal and external boundaries
• Fairness: Fairness means “treating all stakeholders s including minorities, reasonably, equitably and provide effective redress for violations. Establishing effective communication mechanism is important in ensure just and timely protection of resource sand people asset as well correcting of wrongs
• Transparency: Transparency “means having nothing to hide” that allows its processes and transactions observable to outsiders. It also makes necessary disclosures, informs everyone affected about its decisions. Transparency is a critical component of corporate governance because it ensures that all of entity’s actions can be checked at any given time by an outside observer. This makes its processes and transactions verifiable, so if a question does come up about a step, the company can provide a clear answer
• Independent Assurance: In progressing transparency it is important for non-direct actors to obtain confidence that that executive actors are leading the entity towards pre-defined intent and not using it for self and obtain expert advisory on how applied approached can be improved. Assurance services provide independent and professional opinions that reduce the information risk (risk that comes from incorrect information).Independent assurance is the verification by a third party (not directly responsible for QA and acceptance of the product/deliverable and/or the reliability of test results obtained from quality control and acceptance testing. This independent assurance insures that (1)the representation or acceptance test results are accurate and provide a fair and equitable basis for construction acceptance and (2) quality control testing is accurate and thus will properly indicate process quality.
• Leadership; Direction “defining and offering leadership on organisation’s agenda within the values and principles that frame the way business should be done. Those charged with governance are responsible for these key strategic issues and for proving leadership in establishing the right culture to drive the performance of the business. Without clear direction, policy and procedures, the organisation will flounder and likely never to realise its long term goals and potential. This should include leadership and core expertise renewal to both retains knowledge/experience, ensure appropriate representation and continuity.
• Stakeholder engagement: Those charged with governance should identify the key stakeholders and how they interact with the business and how they are engaged with to ensure the best outcome for the organisation. Stakeholder engagement included in the annual agenda and strategic plan.

Conclusion

In summary, the responsibility an individual assumes when he became charged with governance of an entity is considerable and one that should only be taken with a clear understanding of, and commitment to, fulfilling this responsibility to the best of their ability foremost for the stakeholder interest. Having a clear understanding of the principles and practices of good governance will enhance the performance of both the individual and the organisation – so how do you and your organisation stack up against this checklist of good governance