That responsibility begins with corporate governance.
From technological developments, climate change, societal demands and the expectations of stakeholders, change is a constant part of any business’s existence. To ensure that accountability is always a part of the business’s identity, corporate governess needs to evolve with the changes that occur.
Corporate governance, simply put, is the collection of rules, practices, and processes that dictate a business’s operations. The responsibility of corporate governance extends to management, directors and even shareholders, to ensure adequate guidelines that drive a responsible and adaptable company. In South Africa, the King Committee provides businesses recommendations of best practices for good governance within certain industries. King IV, the Committee’s latest report, is currently seen as the standard for best practice in corporate governance in our country.
While good corporate governance is there to guide internal procedures, in practice it also builds trust in a company and optimises the long-term success of the business. This is achieved through the increased responsibility, accountability, fairness, and transparency that comes with a good corporate governance framework.
For a corporate governance framework to be effective, it must cover the policies and procedures that relate to decision-making, day-to-day processes, and managerial conduct. To ensure the necessary accountability and business objectives set out in King IV are mirrored in a business, the updating of a business’s Memorandum of Incorporation should also be considered.
If your business is ready to step up its game and embrace its corporate responsibility, get in touch with CMM Attorneys to help you get your corporate governance in order.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)