Leadership and governance are basic strategies that companies need to embrace in their daily operations to make their operations to be of great importance. My understanding of corporate governance is that it varies among companies as factors are determining the design and structure of the board. This includes the size of the company, the type of industry, the level of globalization, sets of skills available, the cycle of industry life, cultural and social system, and the national IR systems among others.
There are governance structures that have been learned. There is the unitary model which is dominated by the INED’s. This structure employs corporate governance which is ruled based where all the operations should be within the law. It has the binding business audit, remunerations, and the nominations of the committees. The shareholders of the company do not have any authority over the B membership. The roles of a CEO and those of the chairman are within one docket and one person executes them.
There is a principle-based model structure where the corporate governance is by the adherence of the codes. It regulates itself and this is the main guiding principle. It’s based on the accuracy of the actions taken by the regulators. There is concentration on independence and objectivity with clear separation of the duties of B and the executive management, and the chairperson and the CEO. There is a need to have external directors. It also has high levels of transparency and accountability.
There is the corporate structure based on the co-determination principles which links labor and capital. This is the 2 tier system. There is much emphasis on the interest of the employees with one-half of the upper supervisory board being the directors appointed through the trade unions to represent the interest of the employees. The other half represents the shareholder’s interests. There is a structure that combines the two systems of unitary and the 2-tier. This connects the cross-holdings and it interlocks the directorship.
For example, Almarai Company in the Middle East is one of the companies with a corporate structure that is a principle-based model. There is a high level of accountability and transparency in the company which enables one to admire it and recommend it to any other organization. The roles of the CEO and those of the Chairman are separated from one another just like those of the Board and the executive management. The company also has good policies which govern the employees in their way of operations and remunerations. The employees’ interests are taken care of and represented at all times during the management strategic meetings. The employees are consulted in all the decision-making processes.
Globalization also is an important factor in the determination of company management. The companies need to embrace both internal and external strategies which will ensure that the company operates well without any interferences and shortcomings. These include monitory budget control, reviewing important business results, ensuring the company’s capability, overseeing the management performance, and being responsible to the owners, regulators stakeholders, and the directorial auditors. Reporting of the financial statements and the general performance of the company is important in the operations of the company and having in place excellent leadership and governance. Corporate governance also has been indicated as a matter of principle to be responsible for oversight, control, and accountability of systems. There is corporate governance that requires guiding principles in the appointment and removal of the CEO. There is also the setting of standards that relates to the input and approval of a corporate strategy and the desired performances within the company (Bedi, 2008).
Bedi, K., 2008. Leadership and Governance. New York: Sterling Publishers Pvt.