The governance profession
"At its simplest level corporate governance can be described as the system by which organisations are directed and controlled."
- Sir Adrian Cadbury (UK, Commission Report: Corporate Governance 1992)
"Good corporate governance is about 'intellectual honesty' and not just sticking to rules and regulations … capital flows towards companies that practice this type of good governance."
- Mervyn King (Chairman: King Report)
Corporate governance such as outlined in King II and King III has certain inherent basic principles which ensure proper business management including:
- Sound corporate practices
What is Corporate Governance?
Corporate governance is a multi-disciplinary business imperative, which can be broken down into discrete components including:
- Sound business processes, procedures and policies to mitigate risk and ensure optimum operational activities;
- Effective asset management within the confines of regulatory, compliance and risk constraints and risk management principles;
- Management commitment to conduct that is universally recognised and accepted as sound and proper;
- Board responsibility for sound business practices and risk management;
- Focus on non-financial business aspects;
- Social responsibility and economic empowerment initiatives;
- Internal audit monitoring and review of internal controls designed to mitigate real, potential and future risks;
- Promotion of commercial longevity and profitability;
- Business continuity and disaster recovery; and
- Compliance and enforcement.