Susana Sierra, CEO of BH Compliance, writes in Forbes about the five requirements for good corporate governance:
Board effectiveness (“solid composition, responsible leadership, members with the knowledge and skills necessary to do their job well, and a structure that not only promotes independence and diversity but also creates an ideal environment for making informed decisions”),
Performance-based compensation (“variable compensation mechanisms that reasonably discourage improper behavior”),
Risk and crisis management (“a risk management committee through which policies and procedures (e.g., annual internal audit plans, climate-related mitigation plans and cybersecurity protocols) can be implemented”),
Strong stakeholder relationships (“Acting in tune with the company’s stakeholders can increase trust in the ecosystem, reduce uncertainties and problems, and improve decision-making”), and
Ethics and transparency (“compliance programs that prevent corruption are vital, but leaders should also prioritize creating a culture of integrity in the organization that discourages bad practices”).
In the middle of a global climate and social crisis, companies are increasingly being exposed to demands related to their social and environmental impact. Having strong corporate governance has become a key component to building the environment of trust, transparency and accountability necessary to progress toward a more sustainable business.The Five Pillars Of Good Corporate Governance