Improving Corporate Governance and Responsibility

Improving Corporate Governance and Responsibility

Corporate Governance and Corporate Responsibility

There are many ways in which a corporation can improve its corporate governance and corporate responsibility. The 1 Business Dictionary defines corporate governance as "the framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in the firm's relationship with its all stakeholders", which closely relates to corporate responsibility, which relates to the business ethics of a corporation. For improvement in these areas, a company's board of directors must sometimes be exposed and ethical business practices must be a focus.

Exposing The Board

Recent concern with corporate governance is the practice of many large company executives abusing their position and putting stakeholder funds into their own pockets. 2 Creating mechanisms to limit the power of executives such as separating the posts of the CEO and chairman as well as have numerous non-executive directors would be recommended for improving corporate governance. Sharing executive audit information with all employees such as meeting attendance, salary, etc, would expose board members so much that they would be forced to run the business ethically.

Social Responsibility

3 Well known economist Milton Friedman wrote, "the only social responsibility of business is to maximize its profits". Maximizing profits do not mean giving shareholders money away however. Improving corporate responsibility can be done in many ways and eliminate wasting money. Proof positive would be the company ‘Stride Rite'. 4 Programs such as corporate child-care and public service scholarships has given Stride Rite the reputation of a great corporate responsible company.