Corporate Governance, Accountability, and Mechanisms of Accountability Essay Sample Ireland

In this essay sample work, we shall discuss the meaning of corporate governance, effective practices of corporate governance, the meaning of accountability, and mechanisms of accountability in corporate governance.

Before we start heading with the sample we must first explain to you the exact meaning of corporate governance.

Corporate governance is how the companies are governed that may include rules, processes, and practices. It may also include accountability and decision-making authority. The processes in good corporate governance help in achieving the objectives of the company while ensuring the faith of stakeholders in the company.

Good corporate governance gives an improved infrastructure as a result of informed decision making and adopting sustainable practices in the business creating a long-term value effectively.

Effective Practices of the Corporate Governance 

Successful corporate governance improves the functioning and overall performance of the business by promoting trust among the stakeholders and shareholders. Certain practices need to be followed by the organization to effectively strive to achieve good corporate governance.

These are the following effective practices of good corporate governance:-

Governance Framework

The governance framework is the requirement for the smooth running and functioning of the company and is considered to be very vital. It forms the basic foundation and bedrock of the business which decides how the organization is governed and must be designed. The structure and design of the company are very important for clarity and the transparency of the roles and responsibilities.

It ensures the effective functioning of the boards, accountability to the stakeholders, and promotion of sustainable practices in the business.

Governance Documentation 

The Governance documentation helps in the establishment of the rules for business to be governed which sets out the rights and obligations of the shareholders and such documentation needs to be accurate and complete which provides evidence for regulators of the governance.

Policies and Guidelines 

Policies and guidelines ensure compliance with the laws and regulations which reflect the culture of the organization, and the process of decision making and streamline internal processes. They are meant for addressing the issues in the organization which must be easy in language and accessible and must be in compliance with the legislation and regulations and goals of the organization.

Effective Board Reporting 

A well-performing board receiving quality reports and sufficient information can ensure good and effective corporate governance. Such boards can make well-informed decisions to develop short and long-term business strategies to ensure the overall sustainability of the business and good corporate governance.

Agenda and Minutes

Every meeting that is conducted in the organization has an agenda of the meeting that helps in grouping the items under the headings that helps the board to deal with the important matters in the meeting.

While board minutes are records of the highest decision-making body of the company and should be of the highest standard and quality, clear, concise, and unambiguous. These minutes must include the important points of discussion, the decisions taken along with the reasons and agreed actions which includes the record of delegated authority.

Subsidiary Governance Policies

Subsidiaries are very important in the business structures in the various areas of the businesses that do ensure corporate governance. The company must put an establishment of the subsidiary governance framework and set out the rules about the subsidiary and the decision-making. It must provide a guide to the subsidiary boards on the roles and responsibilities and reporting requirements to the company.

Accountability for Good Corporate Governance 

The board of the company is very much accountable for the risks and challenges and successes of the organization. It must demonstrate transparency in the decision-making and must take up the responsibility for all the activities of the company.

The board has the responsibility to present a fair, understandable, and balanced assessment of the position of the organizations and gives the prospects to the stakeholders. The Corporate Governance Code makes the listed companies much more accountable which is a resource for managing the behaviors and the risks.

There must be honest reporting and annual financial statements to help the board to communicate the results and document the performance of the company. The strategic report shall present a fair review of the development, position, and performance of the company.

Such accountability of the board must be subjected to review as a part of the culture of the entity. An application of the best practices protects the reputation of the company by improving the processes of accountability.

Mechanisms of Accountability for the Corporate Governance 

Corporate governance shall examine the broad range of all the mechanisms of accountability. It shall include the disclosure, board of directors, financial reporting, audit committees, external audit, governance regulations, and the institutional investors.

Corporate accountability is the obligation to explain the actions or conduct of the company. The accounting and finance researchers have focused on the variety of mechanisms of accountability for corporate governance. It first includes the internal company mechanisms regarding the board performance and focused on the roles of the non-executive directors, chairman, and chief executive.

There is also research on the examination of subcommittees of the board as mechanisms for the improvement ineffectiveness of the board. Another important mechanism for improving corporate governance is the role of institutional investors. There is also a mechanism of transparency for aligning the interests of the management and shareholders.

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