For a company to achieve its maximum potential in success and profits, there are certain criteria that they need to base their governance on.
These criteria are essential for the smooth and efficient running of companies to form solid relations among their stakeholders.
Stakeholders comprise a board of directors, managers, employees, and even shareholders. These entities are responsible for the functioning and working of the company, without their cooperation; among each other, the company will suffer a lot of damage and loss.
These three pillars of governance include; transparency, accountability, and security.
Transparency in blunt form means being able to not hide anything from anyone.
For a company, being transparent relates to having all their transactions and processes observable by other people that are not part of the company.
This ensures that these processes dutifully comply with legal requirements and ensures that parties that are affected by the company’s decisions are well informed and not left out in the dark.
Company processes might include; services they offer or sending packages and parcels.
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Transparency has been a major factor in preventing fraudulent activities in corporate institutions especially with the rise of financial scandals experienced in the corporate setups in the 2000s.
Besides preventing companies from taking part in huge money-making schemes, transparency is also responsible for giving a company a presentable reputation which is key in attracting investors to grow the company.
Transparency is important in institutional governance since all the company’s transactions are visible to outside observers meaning, all the processes are verifiable and in any case, the company is questioned on a certain process or step, the company will have no trouble providing answers.
In some areas, transparency is not even an option or a route a company can take if they wish rather, it is a legal requirement.
A company should be able to verify all their actions regardless of any internal or external audit being performed on them.
Accountability is also known as answerability or liability. For a company to have integrity, it takes more than transparency, it also requires the company you be accountable for all its actions.
Shareholders are big on this, they are keen to understand who will take the blame when something goes wrong within the company. Knowing that the company will take up responsibility if anything happens attracts more and more shareholders.
Again, accountability grew in concerns also with the rice of financial scandals in the 2000s where large sums of money were stolen and no one was obliged to answer for these fraudulent activities,
Being accountable relates to having a sense of responsibility which ultimately means that a company will be motivated and keen to carry out their transactions well while doing more than what is expected from them.
When companies understand the whole weight of their actions, they are more likely to ensure all their tasks and transactions are carried out properly and when they are successful in this regard, they will have a feeling of accomplishment which will resultantly act as a fuel to aim to do better all the time.
A company is purposed to ensure all their processes and transactions are transparent and all the stakeholders are accountable while at the same time all the enterprise’s data is safe and secure from any unauthorized access.
Companies that are prone to security breaches risk exposing their clients’ personal information to the public. A catastrophic breach will damage the company’s image and overall public trust, meaning even with transparency and accountability with no security, shareholders will not be attracted.
Companies these days are forced to adhere to strict security standards to prevent unnecessary breaches of their data. The amount of sensitive data that is handled within a company’s board of directors is unfathomable, thus needs to be kept as safe as possible.
All together; transparency, accountability, and security form the three major pillars that dictate a company’s integrity and success. It is not an easy task for a company to achieve all three aspects but the rewards are worthwhile.
More shareholders are more likely to be attracted to invest in companies that meet all these three pillars in their governance.
Also, to have a well-organized company you need to have a well-established and functional company base. This is ideally a company office or headquarters base.
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