Fortune News | Oct 24,2020
Jun 27 , 2020
By Asseged G. Medhin
Governance is all about justice and security. Any organisation, including entire countries, that cannot ensure these two essential features lose their right to govern whatever resources they have. Irrespective of the philosophy and the system adapted for governance, the people at large must feel secure from internal and external dangers, and they must be confident that dispute resolution will be carried out fairly.
It is no secret that the most key assets within the frame of corporate governance are people at every level of organisational hierarchy. There is an invisible but immense potential to be cultivated under sound corporate governance using these assets. The governance is to the people, from the people and by the people.
If the company ensures justice and security with the corporate framework, which entails career stability, engagement, belongingness, a sense of added value to customer satisfaction and image building, there is bound to be breakthrough. If this is not the case, the opposite will be true.
A company that does not attach value to these cornerstones of corporate governance leaves room for bribery, nepotism, chaos and periodical deterioration of norms, customs and cultures. Most critically, the result is a fall in productivity. There is no end in sight to the decay that can occur as a result.
If there is no justice and security in the company, there will be no room for fairness, initiative-taking and developmental thinking. There will be no dynamism, planned targets will not be achieved, and customers will be subjected to poor service.
A well developed corporate governance structure of a modern company should embrace sustainable incomes, learning and growth, stimulate and effect development and maintain healthy and sound customer relations. This is the covenant of all board members of a company, and it is underwritten by the dual foundations of justice and security.
When leaders of companies give promises but fail to walk the talk on their core principles, no amount of capital will be able to address the devastating cataclysm that floods the entire enterprise. The second a company loses its trustworthiness with its own employees, it is hard for a company to survive afterwards.
A transparent code of corporate governance that puts aside the well-being and professional satisfaction of employees at the top inevitably improves the service for its customers and increases the returns to its shareholders.
“Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals,” wrote Adrian Cadbury, a long time chairman of Cadbury, one of the world’s largest confectionery companies. “The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society.”
The board of directors or leaders should understand and embrace these central tenets of corporate governance wholeheartedly. The alternative is inevitable failure.
PUBLISHED ON
Jun 27,2020 [ VOL
21 , NO
1052]
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