What is corporate governance?
Corporate governance refers to the processes, structures, and mechanisms that impact how businesses are controlled, directed, and managed. It provides clarity over power, authority, accountability, and decision making.
Corporate governance – the board and the management
Organisations face many challenges when managing their day to day and long-term operations. The board and the management can overcome them by having a proper corporate governance framework in place.
The board leads and manages the business in the right direction. The management on the other hand takes care of the day-to-day corporate governance activities fall upon the management.
In other words, the board sets the framework, and the management implements it. This must be monitored and audited internally to make sure that the organisation is adhering to all the governance practices.
The role of the in-house lawyer in corporate governance
As the guardian of the business, it is no surprise that the legal department plays a major in role ensuring good governance in the business. In-house lawyers are expected to contribute to corporate governance by advising on relevant legal and regulatory complexities. What’s more, legal teams must take to measures to mitigate risks that can impact the business and protect the organisation from financial and reputational losses.
With a well-designed corporate governance framework including effective processes and controls in place, businesses can achieve their objectives while safeguarding the interests of all stakeholders.
To enable informed decision-making, good governance is key. After all, the longevity of a business is driven by conscious decision-making that guarantees sustainability and goodwill.
