What is a corporate governance handbook?
A corporate governance handbook, or manual, is a practical guide for helping board members implement good governance. Do you have one?
A good governance handbook
This provides directors, executives, and shareholders with an overview of the current corporate governance framework and practices and a practical toolkit intended to help implement good governance.
Moreover, it is a tool designed to help companies of different levels of development better understand corporate governance and its benefits.
In addition to providing an overview of how companies can improve their corporate governance, the handbook should provide a link between internationally recognised best practices and local laws, codes, and regulations.
In this way, the handbook helps policymakers identify gaps and strengthen regulatory frameworks.
A handbook is also intended for those who want to learn about good corporate governance principles, foundations, and benefits.
The core functions of a board of directors
A corporate governance handbook will examine the core functions of a board of directors, including:
- How to ensure that the company achieves its mission and objectives as agreed by the board
- How to assess and manage the risks faced by the company
- How to monitor company performance
- How to review internal company controls
- How to supervise the financial and budgetary planning processes
- How to approve contracts, finance and investment in excess of specified thresholds
- How to be accountable to members and external stakeholders
- How to ensure the company is managed appropriately
- How to meet regularly as a board (as is appropriate) and work effectively in governing the company
Company directors must ensure that they comply with the range of obligations set out in their jurisdiction’s Companies Act.
Five key principles of a board of directors
Good corporate governance is based upon five overarching principles. The board of directors is responsible for:
- Providing leadership to the company
- Exercising control
- Ensuring transparency and accountability
- Working effectively
- Behaving with integrity