Corporate governance is the system by which companies
are managed, directed and controlled. The system of corporate governance is a
set of actors interacting within the framework of the law. It protects the
interests of major stakeholders in a corporation by ensuring that adequate
checks and balances are not just enshrined but complied with. Below are some
international best practices in corporate governance.
1.
If
possible the German model of two tier of directorship should be recommended and
adopted by other countries; that is to say, Management Board and Supervisory
Board.
2.
Offices
of Chief Executive Officer/Managing Director and Chairman of a company should
no longer be fused.
3.
Tenure of
office of Chief Executive Officer should be fixed to prevent perpetuation.
4.
Board of
Directors should include a balance of Executive and Non-Executive Directors.
5.
There
should be transparency in the procedure for appointment of auditors.
6.
There
should be limitation to the number of shares that can be owned by a member.
7.
There
should be regular re-election of Directors.
8.
Modalities
must be put in place to ensure transparent relationship between external and
internal auditors of a company so as to avoid cooking the books of the
company’s financial transactions.
9.
No
individual should unduly hold large number of shares in large companies.
10.
Rules of
corporate democracy and sovereignty must be followed.
11.
Transparency,
Accountability and Credibility in the management of a company.
12.
The
interests of shareholders and stakeholders of the company must be protected.
13.
Members
Direct Action to protect the rights of the minority shareholders.
14.
Regular
and continuous scrutiny of the financial transactions of the company by persons
independent of the company; that is to say, Auditors.
15.
The mode
of arriving at decisions must follow due process. This means that the decisions
are to be taken at duly convened meetings which requisite notices had been
given to members.
16.
The
Provision of a Director acting as a Secretary ought not to be abused.
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