The recent corporate accounting scandals in the us have focused the attention on the responsibility of the Board on managing the affairs of the company in the best interests of all stakeholders, but also employees, creditors, and the community at large.

There are many issues which have been recommended as being critical to the establishment of good corporate governance, particularly in respect of public companies and a number of landmark report have been issued ,including the Organization for European Co-Operation & Development   (OECD) ‘Principles of Corporate Governance’ all of which focus on the need for  directors close involvement (particularly in strategic planning, risk management and performance assessment),the need for transparency and full disclosure, and the need for internal mechanisms that ensure that the governance objectives are met.

The Board is responsible for identifying and managing risk, and this risk can come numerous sources, including competition, failure of new product risk of losing critical employees to name but a few. In addition to the need to be equally able to identify new business opportunity, and where necessary  to take  calculated business risks. Often the risk of taking no risk is riskier than the risk itself.

Good internal control mechanisms are critical to ensuring the objectives of all stakeholders are being met, and should inter alia, include financial, operational and compliance controls, as well as risk management policies which will significantly reduce the possibility of poor judgment in decision making, human errors, and deliberate breach of procedures.

It is also note sufficient that such controls and mechanism are built into operation; they may also be monitored for effectiveness, reliability and relevance.

Internal audit of the company and the establishment of an audit committee are also key components of a good corporate governance structure.

As a director / partner / shareholder responsible for the management of a public or private company .

It is your responsibility to ensure that a good corporate governance structure is in place, and where it is not to raise your concerns, and advise your colleagues on the Board of the risk of not managing the affairs of the company in a manner which protects the interests of all the stakeholders.