Daffodil International University
Faculties and Departments => Business & Entrepreneurship => Business Administration => Topic started by: kamruzzaman.bba on February 24, 2018, 07:01:11 PM
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Corporations need comprehensive governance frameworks that give themselves the tools to prevent risk and make effective decisions. Once a company establishes its rules of governance; board members, steering executives, as well as managers should know exactly what their roles are and how they play into the overall organizational structure. Governance solidifies each person's position so that they don't stray from the mission. Proper governance structures identify the distribution of rights and responsibilities among different participants in the corporation and outline the rules and procedures for making decisions in corporate affairs.
Good governance can offer a number of important benefits to organizations, including:
1. Better organizational strategies and plans
2. Improved operational and process effectiveness/efficiency
3. Improved project management and delivery
4. More prudent regulatory compliance, financial and risk management
5. Improved member and stakeholder/employee engagement and communication flow
6. Increased agility to which an organization can deliver on its purpose and goals
Effective governance structures allow organizations to create value, through innovation, development and exploration, and provide accountability and control systems commensurate with the risks involved.
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Ten Principles that Promote Good Governance
Organizations striving to improve governance need to take a close look at their internal business structures, processes and projects. The following ten principles provide a useful starting point for corporations when considering what constitutes good governance:
Roles & Responsibilities - There should be clarity regarding individual responsibilities, organizational expectations of executives and the role of executive and steering committees
Structure & Composition – An executive committee needs to have the right group of people, having particular regard to each individual’s background, skills and experience, and how the addition of an individual builds the collective capability and effective functioning of the committee
Purpose & Strategy – The executive committee plays an important role in setting the vision, purpose and strategies of the organization, helping the organization understand these and adapting the plans to implement them
Risk Management - By putting in place an appropriate system of risk oversight and internal controls, executive committees can help increase the likelihood that their organizations will deliver on their purpose
Organizational Performance - The executive committee determines and assesses appropriate performance categories and indicators for the organization
Committee Effectiveness – An executive committees effectiveness may be greatly enhanced through: careful forward planning of board-related activities; committee meetings being run in an efficient manner; regular assessments of organizational performance; having an executive succession plan; and the effective use of sub-committees, where appropriate
Accountability - It is important that the executive committee ensures there is a flow of information to the board that aids decision-making; there is transparency and accountability to external stakeholders and to employees throughout the enterprise; and the integrity of financial statements and other key information is safeguarded
Organizational Maturity - The executive committee has a role to play in enhancing the capacity and capabilities of the organization they serve
Culture & Ethics - The executive committee sets the tone for ethical and responsible decision-making throughout the organization
Engagement - The executive committee helps an organization to engage effectively with stakeholders and employees