Good governance facilitates efficient, effective and entrepreneurial management that can deliver stakeholders value over the longer term. It is about commitment to values and ethical business conduct. It is a set of laws, regulations, processes and customs affecting the way a company is directed, administrated, controlled or managed. Good corporate governance underpins the success and integrity of the organizations, institutions and markets. It is one of the essential pillar for building efficient and sustainable environment.
The core functions of accounting activities are to track the company’s financial position and performance. These activities play an important role in determining whether the company is fulfilling its corporate governance policies or not. The role of accountants is to ensure that the controls and functions as related to the corporate governance are sufficient enough and are applied responsibly. Accountants also need to ensure that the rules, policies, procedures, processes, strategies and regulations of the company are in accordance with the corporate governance. As noted by Ponduri, Sailaja, and Begum (2014), the role of accounting is critical with regard to corporate governance since it is the accountants and auditors who are the primary pro¬viders of information to the capital market participants and its
Introduction What is Corporate Governance? Corporate governance is a system which conduct and manage the business of a company to enhance their business prosperity and also corporate accountability with the ultimate objective of realizing long-term shareholder value (Report on Corporate Governance, February 1999). It also help to advance in entrepreneurial and cautious management for the company to attain their achievements. Furthermore, corporate governance has distribute to 4 Fundamental Pillars which involving accountability, transparency, responsibility and fairness. Fundamental Pillars of Corporate Governance As an explanation, accountability is refer to clarify the governance’s roles and responsibilities, also involving voluntary efforts to ensure the alignment of managerial and shareholder’s interests hence monitor by the board of directors.
It is about maximizing the profits and achieving the goals with protecting the interest of stakeholders and therefore increasing the value of shareholders. The ultimate goal of Corporate Governance is maximising the shareholder’s value with protecting the interest of stakeholders. Every organisation should aim for sustainable competitive return. Corporate Governance is not just corporate management, it is something much broader, it includes a fair, efficient and transparent administration to meet certain goals. It is a system of structuring, operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers.
INTRODUCTION Corporate governance is the processes, rules and relations that a company is directed, governed or controlled by to fulfil its goals. In corporate governance, the interests of different stakeholders must be balanced. The stakeholders include the suppliers, customers, shareholders, management, the government and the community at large. According to Fernando (2006:47) the assumption is that with the complexities of investor-board relationship in large corporations, shareholders must have adequate and correct information in order to give effective control. There are principles that the corporate governance is based on which are to conduct the business is an appropriate manner, to be transparent when it comes to information about the business finances, to run the business fairly.
The company is committed to good corporate governance for sustainable success. It provides detailed information on various issues concerning the company’s business and financial performance. The company respects the inalienable right of the shareholders to information on the performance of the company and considers itself a trustee of its shareholders. They believe that sound corporate governance is critical to enhance and retain investors trust. Accordingly, they always seek to ensure that they attain their performance rules with integrity.
Corporate Governance as stated in the statement above, function as agents of shareholders, within the corporate governance ecosystem. Shareholders who exercise their rights as shareholders, directly influenced the boards, can ensure responsible actions by companies. Gatekeepers and influencers, insinuated between the shareholders and company, play an important role in promoting self and market discipline, hence in reducing the need for regulatory discipline. Last but not least, private and public enforcement have an important role in ensuring that corporate governance are held accountable through actions by the regulators parties. Proactive actions by the various parties is crucial and this reinforces the corporate governance culture and ultimately
What is corporate compliance? Compliance - The word compliance is defined as the act of adhering to or conforming to a law, rule, demand, or request. In a business environment, conforming to the laws, regulations, rules and policies is a very important part of business operations often referred to as "corporate compliance." Corporate compliance involves keeping a watchful eye on a fast-changing legal and regulatory climate, and making the changes necessary for the business to continue operating in good standing within its industry, community, and customer base. In a broader sense, corporate compliance extends beyond mere legal and regulatory conformity into the realm of promoting organizational ethics and corporate integrity.
CHAPTER 3: CORPORATE GOVERNANCE 3.1 Introduction Corporate governance is important element to direct and managed the companies or institutions . It is refers to the way the company or institution be governed. One of the objectives of corporate governance that wants to be achieved is to balancing the interests of many stakeholders within the institutions or company such as the shareholders, management, customers, suppliers, financiers, government and the community. The implementation of corporate governance is involving the various interactions of participants between shareholders, board of directors, and institution’s management. The interactions are important in order to ensure the objective of corporate governance can be achieved which can provide benefits to all the participants.
THEORITICAL REVIEW Good Corporate Governance The concept of Good Corporate Governance (GCG) is a concept that is time to be implemented in companies that exist in Indonesia, because through the concept of the structure of the company, which consists of elements of GMS, directors and commissioners can be established relationships and working mechanisms, , Harmonious authority and responsibility, both internally and externally with the aim of increasing the value of the company for the benefit of shareholders and stakeholders. GCG is needed to encourage the creation of an efficient, transparent and consistent market with laws and regulations. The implementation of GCG needs to be supported by three interconnected pillars, namely the state and