The
rules and processes that structure the ways in which
organizations operate are of interest to students of
business, leadership, and management. What some simply
define as `rules' and `processes' are in fact complex
arrangements that may incorporate legal, cultural, and
other elements. While definitions of corporate governance
typically differ, depending to whom one speaks, in general,
corporate governance refers to the set of processes,
customs, policies, laws and institutions that affect
the way in which a company or a corporation is directed,
administered or controlled. It also includes the relationships
and exchanges between and among the many players involved
in the organization.
These are normally referred to
as the stakeholders. Stakeholders are chiefly involved
in advancing the organization towards a set of defined
goals. It is the monitoring, oversight or governance
of these goals and all operations connected with the
same that constitute the practice of corporate governance. When
we speak of corporate governance, we usually think of
boardrooms and boards of directors. What this says is
that corporate responsibility is typically vested in
its leadership. Depending on the form of business and
legal constitution, it is normally the board of directors
or other leaders who are tasked with managing the business
of corporate governance.
However, this is a narrow view.
As we have already noted, other stakeholders should
be factored into the corporate governance equation.
While the principal players may well be management,
shareholders and boards of directors, other important
stakeholders include employees, suppliers, customers,
banks and other lenders, regulators, the environment
and the community at large. This draws a much wider
band of ownership of corporate governance than is commonly
articulated. It also liberates corporate governance
from boardrooms, perhaps underscoring the need for a
broader conceptualization of corporate and governance. |
