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. It requires companies to develop and closely monitor comprehensive and robust programs and mitigate any number of possible risk factors.
Corporate governance can overwhelm growing companies that are just beginning to realise the importance of tackling this issue, which in the end becomes a full-time job. To begin, it is important that companies understand the five foundational elements of any strong corporate compliance program.
1. Ethical to the Core
A code of ethics is central to any successful corporate compliance strategy to help outline and define a company’s business practices. You should create this definition by first beginning with a company’s employees. Employees build and define an organisation, and all too often, those at the top have a tendency to forget this. Employers need to focus on hiring individuals who share that same ethical and moral code that they want to shape the company’s corporate culture.
2. Aligning Company Goals with Governance Objectives
Corporate governance is a full-time job, and one as we mentioned above that can be difficult to maintain. Planning ahead and framing the company’s goals so as to align with particular goals of their governance program is a way for a company’s leaders to lighten this burden.
3. Strategy in Management
Corporate governance is all about ensuring the interests of the company’s stakeholders are defended, and that these individuals receive greater say in the handling of important company matters. Companies will need to begin developing strategic plans to guide better the transition of certain powers and reflect the growing control and importance of shareholders.
A solid structure and organisation within the company is essential to fluidly implementing and dispersing corporate governance objectives. Companies will need to be able to monitor all of their dealings, interactions, and transactions effectively. One of the fundamental objectives of corporate governance is for companies to develop more transparent business practices, meaning a rigidly structured framework through which to trace all such activity efficiently.
5. Reporting Systems
One of the more obvious goals of corporate governance practices is fraud risk management – a subject of critical importance when implementing a compliance strategy to prevent any unlawful or illicit activity. Reporting systems if well-designed and applied should allow companies to monitor successfully and detect any fraudulent activity by using their employees for its eyes and ears. Training employees to identify potential issues with such reporting systems can include phone numbers or emails to contact, as well as notes on pay stubs. Encourage such reporting by including that employees can remain anonymous.
Questions about implementing a corporate compliance program for your business? Let us know on 1300 544 755.
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