Corporate governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment
Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, mangers, shareholders and other stakeholders and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set and the means of attaining those objectives and ...view middle of the document...
It is not something that is apart, different, or alienated from the main organization or managerial effort. It is, in fact, an inalienable and integral part of management function. As a strong and unfailing blend with any management function, it can be a positive, constructive and catalytic influence by:-
(a) Raising storm signals regarding complexities or neglect of procedures
(b) Placing signposts for the path to purposeful and effective achievement of objectives
(c) Devising correctives and generally acting as a prophylactic agent
(d) Eliminating the corrupt and the crooked.
Vigilance as it actually mean, is an inherent part of any activity that is undertaken in the universe. Every individual in his own discipline has to ensure that a reasonable care is taken of his assets and resources and that they are not squandered away for other than legitimate work and rightful purposes. An incomplete perspective on this count would lead to undesirable result in the performing one’s role. The quality circles (QCs) and the Total Quality Management (TQMs) are the recent jargons in the corporate world. The QCs and TQMs, in reality, call for eternal vigilance at all levels, in order to ensure that the systems and procedures laid down in the quality manuals are scrupulously followed. The checks and supervisions as stipulated in such quality manuals amounts to taking precaution or caution for carrying out the assigned duties and responsibilities within the frameworks of the organization, which perhaps, in a broader sense is termed as Vigilance. These concepts have been accepted and well recognized without knowing the fact that what operates such concept is nothing but eternal vigilance.
While policing is intended to catch those who do wrong things the vigilance function is to catch those who are doing the things wrongly, intentionally. While the job of policing is not to catch someone who does good things, it is the job of vigilance function to catch someone doing right things. Every individual can do this function and catch himself or herself for doing things rightly or wrongly and then others too.
Therefore, vigilance is a function. It is a core management function to be performed by everyone simultaneously along with every other function that one performs.
Interface between Corporate Governance and vigilance