Abraham Shilomboleni
In the simplest term, I would regard corporate governance as a set of guidelines, customs, and procedures that must regulate and control any given business.
This generally entails striking a balance between the needs of all of a company’s various stakeholders, including shareholders, senior management, clients, suppliers, financiers, the government, and the local community.
With this key element of corporate governance, we need to include every aspect of management – from action plans and internal controls to performance assessment and corporate transparency – as these aspects serve as the framework for achieving any business’s goals.
Stiff adherence is key and non-adherence is adverse to the detriment of the organisation.
Globally any non-adherence to corporate governance has always led to failed entities. Applying adherence to corporate governance leads to increased accountability. The King’s report on corporate governance is globally regarded as a global benchmark on this topic – the collapse of prominent private and state-owned companies as a result of poor and ineffective corporate governance.
Both economic and political interference in any given business or entity should align itself within the parameters of absolute adherence to pure corporate governance. Without this, the situation leads to failed entities mixed with ineffective board members whose function is ironically to serve in the best interest of such entities and direct the organisation in the most prime preferred direction that is within the mandate of the core existence of such an entity and not the vice versa.
Failure to submit financial reports that are unbiased, independent and free from utterances is one of the many elements that lead entities to dismally fail.
Poor management, the composition of weak board members, and infringing politics in the management of a business are few of the many aspects that have made reputable companies collapse and we should wake up and learn from these by applying a stiff adherence to good corporate governance.
Management is key in any area of business, be it domestic or global practice, hence good corporate governance matters the most.
*Abraham Shilomboleni holds a Bachelor’s Degree in Accounting. Micro and Macro-Economics formed an integral part of his studies and career. He is pursuing an Honours Degree in Business Management. Abraham is an author and a knowledgeable financial and economic expert. He also works for NUST.