1SUSTAINABLE LEADERSHIP Graphical representation Corpora te gov Policies esInternal audit Transparen cy Legal systems Systems Board Committee s Accountab ility Stakeholder 1:government Stakeholder 2: customers Stakeholder 3:interest groups Stakeholder 4: employees Stakeholder 5: community
2SUSTAINABLE LEADERSHIP Description Thereforefromtheabovegraphicalrepresentationitcanbesaidthatcorporate governance includes all the legal processes laws and systems, transparency and accountability, policies, the board committee and also internal audit which has an impact on operations of the businesses (Cuomo, Mallin and Zattoni 2016). And the functions or the pillars of the corporate governance has a major impact on the company’s external and internal stakeholders such as the government, the customers, the suppliers, the employees of the organization and also the interest groups and the local communities. Therefore corporate governance is a framework that helps in regulating and operating the company smoothly with the help of various processes and legal systems. It also helps in defining the roles and responsibilities of different stakeholders of the company such that any conflict between them can be avoided. According to the book Corporate governance by Christine Mallin, different stakeholders have different stakes in the company such as the employees of the organization have a stake are interested in the proper functioning of the company because the employees get their livelihood from working in the company (Mulyadi and Anwar 2015). Moreover the employees want a good work environment and therefore the company should try to meet the needs of the company. The customers are also important stakeholders of the company because the customers try to revisit a company which satisfies and meet their needs and therefore company should also try to create loyalty of the customers by offering them all those goods and services that can meet their needs. Local communities also have a stake in the operations of the company because organization provides employment to them. Corporate governance is based on three main pillars that include- transparency, accountability and security (Daiser, Ysa and Schmitt 2017).In order to meet the needsofthestakeholders,transparencyisrequiredintheoperationsofthecompany.
3SUSTAINABLE LEADERSHIP Transparency in the operation refers to the ability make all the processes and systems of the organization visible to outsiders or external stakeholders. For the same purpose, the organization makes disclosure of all the important information and also makes sure to comply with different regulations. The second pillar on which corporate governance is dependent is accountability or the ability of the organization to take the responsibility of all its activities and by doing the same it builds its integrity (Governance 2019). Therefore organization tries to build the confidence of the shareholders by taking responsibility for its activities. Moreover by taking accountability of own activities, employees performance and improve and as a result the overall organizational performance can improve. Security refers to the third pillar on which corporate governance is based is security or the ability to secure the organizational data from unauthorised access.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
4SUSTAINABLE LEADERSHIP References Cuomo, F., Mallin, C. and Zattoni, A., 2016. Corporate governance codes: A review and research agenda.Corporate governance: an international review,24(3), pp.222-241. Daiser, P., Ysa, T. and Schmitt, D., 2017. Corporate governance of state-owned enterprises: a systematicanalysisofempiricalliterature.InternationalJournalofPublicSector Management,30(5), pp.447-466. Governance,C.(2019).CorporateGovernance.[online]Global.oup.com.Availableat: https://global.oup.com/academic/product/corporate-governance-9780198806769? cc=in&lang=en& [Accessed 16 Dec. 2019]. Mulyadi, M.S. and Anwar, Y., 2015. Corporate governance, earnings management and tax management.Procedia-Social and Behavioral Sciences,177, pp.363-366.