Guiding Principles of Corporate Governance
Corporate governance is the overarching set of policies, procedures and relationships that enable an organization to establish objectives, set ethical boundaries to the acceptable means with which those objectives will be met, monitor the achievement of objectives, reward successful achievements and discipline unsuccessful or inappropriate attempts to meet objectives, in order to keep the organization aligned with the needs and interests of its primary stakeholders.
The following guiding principles reflect a compendium of viewpoints from the sources cited in the References section. Individual quotations and citations are not provided since the intention is to create a summarized set of viewpoints from multiple sources. Prescriptive solutions have not been proposed since corporate governance does not allow for a “one size fits all” approach and companies will need to find their own best practices based on the company’s age, size, complexity, extent of international operations, etc. Companies should seek legal advice before implementing specific corporate governance policies and procedures to ensure compliance with applicable laws and regulations, including securities exchange listing requirements.
These Guiding Principles serve as the foundation for the American Corporate Governance Index, an annually published collaboration between the Neel Center and The Institute of Internal Auditors to gauge the health of corporate governance for publicly traded companies in the U.S. To learn more about the ACGI, click here.