Corporate governance broadly refers to processes and practices by which corporations or businesses are controlled and managed.
With the seemingly numerous “city scandals” that hit the headlines, good Corporate Governance is as relevant now as it has ever been. What it all boils down to is that there are standards and requirements placed upon every organisation in relation to how it conducts its affairs.
Don’t be mistaken into thinking that corporate governance is only something that FTSE companies and multi-nationals need to worry about: it impacts on every business.
Responsibilities need to be clearly identified in relation to the board of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders as well as the rules and procedures for making decisions…and not just business decisions: even aspects such as CSR (Corporate Social Responsibility – i.e. your “green” or charitable credentials) need consideration
Interest in the corporate governance practices of modern corporations, particularly in relation to accountability, increased following the high-profile collapses of a number of large corporations during 2001–2002, most of which involved accounting fraud; and then again after the recent financial crisis in 2008. Corporate scandals of various forms have maintained public and political interest in the regulation of corporate governance.
Regulatory compliance is in simple terms, ensuring that you, as an organisation, are aware of and take steps to comply with relevant laws and regulations. To not do so could not just expose the organisation but potentially render directors and other executives exposed to sanctions.
Due to the increasing number of regulations and need for operational transparency, organisations are increasingly adopting the use of consolidated and harmonized sets of compliance controls. This approach is used to ensure that all necessary governance requirements can be met without the unnecessary duplication of effort and activity from resources…how this changes in light of the impending EU ‘in or out’ referendum remains to be seen!