Why Corporate Governance?

By April KLAZEMA

When people think about corporations, they usually imagine a large company with hundreds or even thousands of employees. With so many people working within one company, there has to be an order and structure that keeps the areas of communication clear and easy to understand. This form of structure is known as corporate governance.

Corporate governance isn’t just one structure though, but instead it consists of the various duties, obligations, and rights that control and direct a corporation. The point of this governance is to properly distribute the responsibilities that those who participate in the corporation have, such as the managers, stakeholders, creditors, regulators, and of course those in the board of directors. In addition to informing these people of their responsibilities, the corporate governance also informs people of their rights within the company.

Corporate Governance Wheel

Corporate governance is an important aspect of business. If you’ve ever wanted to create a business, then it’s important to explore the importance of corporate governance and how it can help your company. There’s a lot that goes into running a business obviously, and understanding things like corporate governance is only one small part of the big picture.

The Goals of Corporate Governance

When corporate governance is done properly, it allows the corporation to work smoothly due to the existence of a clear level of accountability and communication amongst the organization, as well as people understanding what their roles and responsibilities are.

To properly understand and utilize corporate governance it is important to understand and follow its most important principles. These principles help establish the roles and responsibilities of the key members of the corporation. The general principles of all forms of corporate governance are generally related to the shareholders, board members, and stakeholders. In addition to this, corporate governance also places a strong emphasis on the behavior of the corporation and how much the corporation discloses to the public.


Learn more at LEAP Africa’s annual CEO’s Forum 2017 themed “Managing Growth for Sustainability”. A session on Corporate Governance will provide a detailed explanation of the principles corporate governance follows, the people these principles have an effect on, the characteristics of good corporate governance among other talking points.

Click here to register for the programme.

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