Corporate Governance is the application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders. Good governance is integral to the very existence of a company.
It inspires and strengthens investor’s confidence by ensuring company’s commitment to higher growth and profits. For success of any company corporate governance is need of the time. A strong and positive presence within Organization can be maintained by following corporate governance. Corporate governance is much needed to stress the importance of sustainability, social development, stakeholders and consumers satisfaction. It is an orientation to provide a valuable service instead of displaying more orientation for profits.
It point out what is good and what is bad and also what is right or wrong. It brings to the notice of the business community the importance of honesty, sincerity and fairness which makes them alert and socially conscious. It reconciles conflicting interest of various sections of the society such as workers, shareholders, consumers, distributors, suppliers, competitors and government and thus, expedites a better relation between business and the society. Corporate Governance extends beyond corporate law.
A commitment by corporate management to abide by the corporate governance and its code of conduct confers a variety of benefits. Its fundamental objective is not mere fulfillment of the requirements of law but in ensuring commitment of the Board in managing the company in a transparent manner for maximizing stakeholder value. The real onus of achieving desired levels of corporate governance lies with corporate themselves and not in external measures. It must be emphasized that the challenge of ethical behavior must be met by organizations if they are truly concerned about survival uprightness, integrity, and competitiveness.
What is needed in today’s complicated times is for more organization to step forward and operate with strong and positive policies of corporate governance. As a result, when the policies of corporate governance are clear and positive, everyone will know what is expected of them. This will definitely give employees the confidence to act with the understanding that what they are doing is correct and will be supported by top management of the organization. At last it can be well said that Good corporate governance practices cannot guarantee corporate success, but the absence of such governance definitely lead to questionable practices and corporate failures, which surface suddenly and massively.
