How to Implement Sound Corporate Governance

SuitsThe terminology surrounding “Corporate Governance” and its significance in the affairs of business, in general, has crept into the corporate world relatively recently.

It is reflected in the King Reports I, II and III and is dealt with in detail in the new Companies Act (2008).

A definition of corporate governance: “Corruption wrecks good governance, inhibits development and sustains despotism. This can translate into economic and societal failure: not only an affront to decency but the tinder that ignites conflict. Stamping out corruption altogether may be unrealistic. Making the world less hospitable to crooks is not”. (Economist / London 10 April 2007)

“While a company’s control system will eventually lessen the gap between detected and undetected crime,unless it continues to evolve, eventually – without good corporate governance – potential wrongdoers will find ways to circumvent it. When fraudsters and other wrong doers know what to avoid, they are empowered to devise new and novel ways to pursue their criminal ends.”

“Companies that make use of effective ethical guidelines, compliance programs (to regulate their corporate governance philosophies) and good corporate governance code, are much less vulnerable to economic crime. The impact of such programmes on a company’s vulnerability to arrive is significant, whether it is asset misappropriation, accounting fraud, corruption or money laundering.”

“In virtually every region of the world Whistle Blowing is playing a major role in uncovering the activities of wrongdoers. More and more companies are now promoting Whistle Blowing policies as an integral part of their risk management programs.” (PWC 4th Global Survey 2009)

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