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Corporate Governance & Compliance

Corporate governance is commonly referred to as a system by which organisations are directed and controlled. It is the process by which company objectives are established, achieved and monitored. Corporate governance also is referred to as the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance includes the relationships among the many players involved (the stakeholders) and the goals for which the corporation is governed within a legal and regulatory framework. The principal players are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large.

Corporate governance is a multi-faceted subject. An important theme of corporate governance is to ensure the accountability of certain individuals in an organisaton through mechanisms that try to reduce or eliminate the principal-agent problem. A related but separate thread of discussions focus on the impact of a corporate governance system in economic efficiency, with a strong emphasis on shareholders welfare. There are yet other aspects to the corporate governance subject, such as the stakeholder view and the corporate governance models around the world (see section 9 below).There has been renewed interest in the corporate governance practices of modern corporations since 2001, particularly due to the high-profile collapses of a number of large U.S. firms such as Enron Corporation and Worldcom. In 2002, the US federal government passed the Sarbanes-Oxley Act, intending to restore public confidence in corporate governance.

Corporate responsibility

A related subject is Corporate Responsibility. This is about ensuring that organisations manage their businesses to make a positive impact on society and the environment whilst maximising value for their shareholders.

Accountants normally have the role to measure and assure Corporate Responsibility reports and supporting the measurements on which good quality information depends. Commonly accepted principles of corporate governance include:

• Rights and equitable treatment of shareholdersOrganisatons should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by effectively communicating information that is understandable and accessible and encouraging shareholders to participate in general meetings.
• Interests of other stakeholders 
  Organisatons should recognize that they have legal and other obligations to all legitimate stakeholders
• Role and responsibilities of the board  
  The board needs a range of skills and understanding to be able to deal with various business issues and have the ability to review and challenge management performance. It needs to be of sufficient size and have an appropriate level of commitment to fulfill its responsibilities and duties. There are issues about the appropriate mix of executive and non-executive directors. The key roles of chairperson and CEO should not be held by the same person.
• Integrity and ethical behaviour 
  Organisatons should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making. It is important to understand, though, that systemic reliance on integrity and ethics is bound to eventual failure. Because of this, many organisatons establish Compliance and Ethics Programs to minimize the risk that the firm steps outside of ethical and legal boundaries. 
• Disclosure and transparency 
  Organisatons should clarify and make publicly known the roles and responsibilities of board and management to provide shareholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company's financial reporting. Disclosure of material matters concerning the organisaton should be timely and balanced to ensure that all investors have access to clear, factual information.

Improvements within Corporate Governance & Compliance

Within the improvement area Corporate Governance & Compliance Voorne Partners is offering the following improvements :

As part of Flexibility & responsiveness:
    •    Accounting & Controlling

and as part of Governance & Compliance:
    •    Audits & reviews
    •    Business Controls & Control environment