The concept of “governance” is not new, simply put it is the process of decision-making and the process by which these decisions are implemented. Corporate governance is specific to the processes you use to run your business and to do business with others.
Bad governance is being increasingly regarded as one of the root causes of corruption in our societies. But what is good governance? Good governance has 8 major characteristics:
- It is participatory (everyone takes part, regardless of gender, race or economic standing)
- It is consensus oriented (most people agree with its principles)
- It is accountable (you can be checked up on)
- It is transparent (you have nothing to hide)
- It is responsive (it changes depending on the needs and situation)
- It is effective and efficient (it makes the business work)
- It is equitable and inclusive (no one person or group is elevated or left out)
- It follows the rule of law (you need to be legally compliant)
Essentially: it ensures that corruption and bad behaviour are minimised, that the views of everyone (including minorities) are taken into account and it is responsive to the present and future needs of society while ensuring that the business is profitable and sustainable.
Good governance and setting up good corporate principles, policies and procedures can feel like a massive undertaking and can be fairly overwhelming. But really, all you need to remember is that you want to build a business that operates well, does good and obeys the law.
If you take the following 13 principles into account when building your company policies, you should be fine:
- Protect the basic rights of your employees
- Follow health, safety and environmental standards
- Continually improvise to optimise quality and resource consumption
- Do not purposely mislead consumers, be truthful and honest
- Adhere to product safety standards
- Encourage feedback and accept new ideas
- Maintain accurate and true business records
- Treat everyone (employees, partners, suppliers, customers) with respect and integrity
- Discourage bribery, corruption and conflict
- Encourage free and open competition
- Meet your commitments and obligations timeously
- Maintain confidentiality of personal and company data
- Develop a company culture that you are proud of
If you aren’t sure how to go about developing your corporate governance policies, give us a shout – we would love to help you!