Corporate Governance is a Journey not a Destination. Discuss.
Submission by Patricia Mbatia
Definition of Corporate Governance: The system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.
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Risks arise as a business develops and continue across its lifetime hence, corporate governance must exist through the lifetime of the business as it goes through its risks and challenges, essentially remain part of the corporate’s journey.
Additionally, corporate governance requires the practice of business ethics and to be ethical, one must sustain the virtuous behavior continuously. Aristotle’s’ definition of virtue, states that, “virtue is a character trait that manifests itself in habitual action”. Virtues are inherited traits that are practiced on a daily basis. There is no end. It must be ongoing, literally a journey.
Additionally, ethical challenges arise during one’s day-to-day life and environment. These challenges must be tackled as they arise in one’s journey through life.
Corporate Governance involves creation and supervision of internal control processes, assuring transparency and accurate disclosure of financial information, overseeing internal auditing activities, and supporting management decision-making on controls. All these occur in a cyclical manner year-in year-out as the organization grows. Hence corporate governance is a continuous process due to the...