New Fifty Two (52) elements of the 1st comparative International corporate governance standards for listed and unlisted companies
Generally speaking, a good corporate governance system, structure and mechanisms can enable organizations to develop and growth in a sustainable direction.
In order to achieve this goal,together with above 52 standards set, we propose in below the new twenty (20) CG principles in addition to previous principles published in the book-part I. These following principles have basic characteristics such as: comply and explain, easy to understand, with people involvement and competent:
Principle 1 – The corporation appoints someone in charge of corporate governance which focuses on substance more than form.
Principle 2 – The company appoints someone or nomination committee who will access strengths and weaknesses of board of directors and recommend changes.
Principle 3 – The company as a whole will build a code of conduct which formalize ethical standards, guides receiving gifts and donation and supports for employee personal development.
Principle 4 – Shareholders or Owner foster constructive relationship with board or corporate leaders to facilitate the success
Principle 5 – The firm as a whole will adopt better CG practices and the concept of sustainability may be involved in the Code or be integrated with financial reports.
Principle 6 – Executive directors work with management to deliver business strategy, deal with strategic planning, standards of conduct, and resource allocation.
Principle 7 – CEO understand and establish clear division of duties between running the board and running firm-business.
Principle 8 – External audit express opinions on financial information, system audits, cost system.
Principle 9 – Supervisory board establish consultative committees on topics chosen by board
Principle 10 – The corporate governance code preserves the long term value of investors’ investment and includes guidelines for board and committees.
Principle 11 – Firm reports on how they positively and negatively impact on the environment, economic and social life of community.
Principle 12 – Board of Director posses a right mix of expertise, experience and knowledge, skills, and make independent judgement o issues of strategy, performance, resources.
Principle 13 – The firm will provide adequate training for management and employee.
Principle 14 – Board meeting agenda has analysis of impacts on minority shareholders
Principle 15 – Chairman ensures constructive relations within BD and discuss key issues with CEO
Principle 16 – The corporation be aware of social responsibilities on environmental and societal interests of communities.
Principle 17 – Internal control establish sound Internal control system at all levels of the company and report conflicts of interest affecting board of directors and management.
Principle 18 – Internal audit provide independent opinion on future risk; Independent opinion on financial performance.
Principle 19 – The firm employ an officer for information disclosure so that shareholders have equal access to information.
Principle 20 – When the company build a code of corporate governance, it will be based on good judgement rather than description.
Thirty three (33) components of the 1st comparative International corporate governance standards for listed and unlisted companies
In summary, a good corporate governance system, structure and mechanisms can enable corporation to enhance solution to prevent and control negative impacts from various risks, manipulation, scandal, fraud and crisis.
To achieve this goal, it is necessary to strengthen and follow certain guidelines for establishing, implementing and checking. Below we proposed twenty (20) simple and general principles for a so-called good corporate governance system, after our series analysis in various models in various countries:
Principle 1 – CEO, Chairman and BD as a whole, need to harmonize between goals of maximizing long tern shareholders’ values and acting in the best interests of shareholders
Principle 2 – The corporation, as a whole, both need to designate person be in charge of corporate governance and assure BD can access appropriate, timely and comprehensive information in order to make the most efficient use of resources.
Principle 3 – A disclosure policy need to disclose corporate governance system and overall BD qualification and explain how they meet the rising business demand.
Principle 4 – The Code of Corporate Governance not only be consistent with the applicable laws and standards, but also ensure a mix between legislation, business practice, self-regulations and voluntary standards
Principle 5 – The rights, roles and responsibilities of stakeholders, both in accordance or go beyond the laws, need to be disclosed
Principle 6 – Shareholders understand business and deal with social and environmental principles
Principle 7 – The corporation understands it is important to establish suitable channels and communication to gather opinions and resolve complaints from stakeholders
Principle 8 – The internal control system should be implemented with proper policies and limits of authority by Board of Directors
Principle 9 – Corporate secretary plays a linkage role both assisting Chair or/and CEO to set meeting agenda, record files, publish meeting minutes and ensure directors have access to timely and sufficient information
Principle 10 – Nominating committee has to evaluate the balance of skills, experience, diversity, knowledge and independence of the board as a whole and as individual
Principle 11 – CEO and Chairman should ensure effective leadership in a way that it can communicate views of shareholders with the Board
Principle 12 – Compensation or Numeration Committee ensures the compensation consistent with the Company’s culture, strategy, business environment and previous policies
Principle 13 – Board of Director has to review financial, operational, risk and compliance controls timely and with transparent principles
Principle 14 – General Meeting is operated in innovative ways where it can facilitate effective shareholders’ resolutions and protect institutional and minority shareholders
Principle 15 – CEO, Chairman and Board pays attention to separation and descriptions of leading business operation different from leading board
Principle 16 – Compliance officer is able to handle and consult with rules, regulations, policies and processes in compliance with business operation and a modern economic society
Principle 17 – CEO may be evaluated by an independent internal auditor
Principle 18 – The corporation should have enough mechanisms to encourage employee’s participation, even their representative on board
Principle 19 – Audit committee comprise at least three (3) members who may be independent board directors and with specialist knowledge and experience in application of accounting principles and internal control process
Principle 20 – The corporation designates a person who is responsible for corporate governance system, who understands that it involves both “hardware components” and “software components” and take perspectives of risk and business in actions
(Source: made by main author)