Each company must eventually tackle corporate governance and unfortunately there is no easy way to go about this. Corporate governance is a complex and tiresome subject requiring companies to look take a wide variety of factors and regulations into account and to shape thorough and strong programs to constantly monitor and mitigate any number of possible risk factors and changing laws when handled properly. Corporate governance can be overwhelming for those companies that are growing and just beginning to realize the importance of tackling this issue which in the end becomes a full time job. It is important that companies be able to understand the five fundamentals and foundational elements of any solid corporate compliance program to begin with.
1. Ethical to the Core
A code of ethics is central to any successful corporate compliance strategy in order to help outline and define a company’s business practices. Beginning with a company’s employees is how this definition needs to be created. Organizations are built and defined by it’s employees and all too often those at the top have a tendency to forget this. Hiring individuals who share that same ethical and moral code that they want to shape the company’s corporate culture is essential for employers to focus on.
2. Aligning Company Goals with Governance Objectives
Corporate governance is a fulltime job and one which can be difficult to upkeep,as was mentioned before. Planning ahead and framing the goals of the company to meet with certain goals of their governance program so that the two may work towards a mutual end is a way company’s leaders can lighten this burden.
3. Strategy in Management
Corporate governance is all about ensuring that the interests of a company’s stakeholders are defended and that these individuals are granted more say in handling of important company matters,at its roots.Companies will need to begin developing strategic plans regarding these individuals and their role in company matters in order to better guide the transition of certain powers as they become necessary in order to account for the growing control and importance being placed on shareholders.
Essential to the fluid implementation and dispersal of corporate structure and dispersal of corporate governance objectives is having a solid structure and organization within a company. Companies will need to be able to effectively monitor all of their dealings, interactions, and transactions, and this means having a rigidly structured framework through which to efficiently trace all such activity, as one of the fundamental objectives of corporate governance is for companies to develop more transparent business practices.
5. Reporting Systems
Fraud risk management is therefore a subject of fundamental importance to the thorough implementation of a compliance strategy as the prevention of any unlawful or illicit activity is one of the more obvious goals of corporate governance practices.Reporting systems should allow companies to successfully monitor and detect any fraudulent activity by using their employees as its eyes and ears only if it is well-design and applied. Training employees to detect a potential trouble with such reporting systems that can include phone or email lines to contact as well as notes on pay stubs is a start to this sort of system. Be sure to include that these employees can remain anonymous as a way to encourage such reporting.