The Importance of Corporate Governance in an Organisation
When we think of corporate governance most of us will likely immediately relate it to the prevention of things like fraud and scandal if implemented correctly. It is equally important to acknowledge the need for corporate governance measures that protect organisations in the instance of a natural disaster or other unexpected event.
Effective corporate governance fosters a culture of integrity. Covering professional performance and the system by which a business operates according to a set of policies, processes and rules, an organisation can position itself within the market as a force to be trusted. Aligning the interests of management with those of key stakeholders, shareholders and its Board of Directors, an organisation practicing good corporate governance will set itself apart from competitors.
Shareholders themselves play a critical role in establishing good governance by wielding their duty in appointing the right people into director roles that will ultimately sit on the board.
Having a good framework in place assures the market that an organisation is well managed and has a clear understanding and plan for its business strategy.
While the purpose of corporate governance is to define the responsibilities of those at the helm of an organisation it also stands on the side of those working within a company by clarifying their rights and roles within the firm. This is all related too to ensuring a clear level of accountability and communication throughout the organisation which all works towards the smooth running of the corporation as a whole.
In addition to managing internal issues, there is also the aspect of how the organisation presents themselves to the public and this comes down to conduct and how much information the business reveals to those outside its walls.
Risks both financial and otherwise contribute to slowing the pace of economic development, however with strong corporate governance in place these risks can be heavily mitigated. The knock-on effect of a strong economy of course too is that a company has a far better forecast for success. It goes without saying then that corporate governance is of course one of the key factors in strengthening economic efficiency and growth, and bolstering confidence in investors.
Candidates applying to corporate governance jobs can expect to enter the market on an average annual UK salary of around £45,000-50,000 according to data from Indeed. Candidates typically require a professional qualification or significant work experience, with some length of industry experience either from a legal, governance or business background.
Employers will look for individuals who not only have the relevant academic qualifications and practical insights, but also those who can demonstrate critical thinking, attention to detail, strong analytical skills and the ability to communicate with people across the business, including those at board level.