Governance

• Corporate governance


  The art of directing and controlling the organization by balancing the needs of the various stakeholders
• Good corporate governance


  • Resolving conflicts of interest between the various stakeholders
  • Ensuring the organization is managed well with transparency and accountability
• Steps to Good Corporate Governance

  1. Ensure a Suitable Board

  2. Review the Board Regularly

  3. Build Solid Foundations for Oversight

  4. Aim for Long Term Value Creation

  5. Prioritize Risk Management

  6. Ensure Reporting Integrity

  7. Provide Timely and Balanced Information

  8. Emphasize Integrity as a Whole

  9. Treat Stakeholders Equitably

  10. Ensure Adequate Disclosures
• Good governance


  The process of decision-making and the process by which decisions are implemented (or not implemented)
• Principles of corporate governance

  • Rights and equitable treatment of shareholders
  • Interests of other stakeholders
  • Role and responsibilities of the board
  • Integrity and ethical behavior
  • Disclosure and transparency
• Corporate regulatory compliance


  A business entity meeting or following certain laws and requirements enacted by federal, state and local governments
• Basic regulatory compliance requirements


  • Recordkeeping
  • Service of process
  • Entity expansion or contraction
  • Other entity changes
  • Annual report filings
  • Business licenses
  • Registered agent representation
  • Tax reporting and payments
• Compliance risks


  Failing to properly comply with requirements can result in the corporation falling out of good standing, with serious implications
• Role of Botswana government


  Regulating the corporate sector through necessary means, as corporate crimes have wide-ranging ramifications
• The government faces a complex challenge in balancing corporate self-regulation and strict rule enforcement
• Fines and penalties are often seen as a cost of doing business by corporations, and do not effectively deter misconduct
• A mix of criminal and civil sanctions, as appropriate, can help address corporate misconduct
• Recent legislative developments for corporate governance


  • Code of Ethics
  • Certification of financial information by the CEO and the CFO
  • Provision and protection of whistleblowers
• The other aspect of the scenario is the fact that fines are considered to be a part of doing business by the corporate, and the civic penalties that are occasionally levied against them is hardly enough to set example
• The criminal sanctions against corporate are not a common phenomenon and the experts believe that can be more potent in deterring corporate misconduct
• Most of the regulating authorities like SEC etc. have no authorities to impose criminal sanctions against corporate
• Penalties and fines bring no respite to the employees, shareholders and communities
• Reasonably evaluated criminal and civic sanctions in a mix as appropriate can help address the issue
• Recent legislative development for corporate


  • Code of Ethics
  • Certification of financial information by the CEO and the CFO
  • Provision and protection of whistleblowers of misconduct
• The government should also ensure that there are not too many agencies to act as enforcement authorities as this may lead to conflict of interests
• It is hard to establish the accountability and responsibility of corporate decisions

  
• A corporation can take infinite liberties with the flexible law structure and systems
• It is possible for corporate decisions to be moral with social goals met along with the business ones

  
• What community members want from corporations

  • Jobs with decent income or wage and which challenges ingenuity and creativity
  • Goods and services of decent quality
  • Safe and healthy work environment
  • Share of interest in the corporation either as an employee, shareholders, suppliers, creditors or just as neighbors
• There is a certain level of trust and agreement whether written or otherwise which exists between the corporation and its constituents
• The public law provides a platform on which the corporations can decide their transaction with these constituents while also providing them the flexibility to expand and contextualize them as per their needs
• Three points identified by the World Bank for emerging economies


  • Transparency
  • Independent Oversight
  • Accountability
• The self-regulation by corporate remain a distant possibility in the near future, especially in the wake of the current economic crisis, the role of legislature and government becomes paramount in ensuring that the larger interests are not compromised
• The corporate behavior tends to have a direct or sometimes an indirect impact on the economic state of the countries and communities they operate in
• The most important objective of a corporation is to serve social and economic goals however simple it may sound, in practice it's the economic goals that prevail
• There is no body to be prosecuted and punished if a corporation engages in criminal activities and does not comply with the law
• Corporate tend to engage in criminal behavior because the benefits outweigh the risk and the resulting costs which are enormous are borne elsewhere
• White collar crimes are not treated at par with criminal offences while the cost factor involved is much higher in the former category of offence
• The corporate managers involved, rarely ever lose their jobs and the companies pay the hefty fines and legal fees
• There is no clearly established system of accountability for corporate which can be acceptable by shareholders, employees, suppliers, government
• A certain level of corporate crime is just accepted as a way of doing business
• Profit motive


  The major or the chief factor that drives corporate behavior
• Corporations indulged in the "pathological pursuit of profit and power" at the expense of everything else
• In recent decades, the business paradigm has shifted somewhat with corporates now engaging in some measure of socially and environmentally responsible behavior to reflect the changing times
• Consumer preference


  The way in which consumers vote with their feet in buying products and availing of services