The Characteristics Of Corporate Responsibility

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Company Responsibility Corporate governance looks at the organizations, privileges, and accountabilities of those in charge of a company. Companies who possess effective corporate governance entails mechanisms that ensure the company executives respect the privileges and welfares of the company’s shareholders, along with holding the shareholders responsible for acting sensibly in regards to the protection, generation, and distribution of the wealth invested in the company (Filatotchev & Nakajima, 2014, p. 290). Companies have found that a successful corporate governance begins with the structural characteristics of the company’s governance mechanisms and an ownership structure (Filatotchev & Nakajima, p. 291). In order for a company to …show more content…
Minculete and Olar (2014) describes five important steps in which companies must utilize in order to instill a responsibility among management and employees (p. 101). A company must provide a clear definition of roles and responsibilities (p. 101). The obligation to be responsible for the person who allocated a certain responsibility regarding the way in which it was carried out. Next, the persons you are responsible to must hold adequate and real information in order to question your reports (p. 101). Additionally, the way in which responsibility is engaged must be open to independent examination (p. 101). Lastly, the presence of well-projected mechanisms of incentives and approvals, this should function properly and infinitely (p. 101). The implementation of control mechanisms is a necessity at all levels and positions within a company and requires two features: a policy that clearly defines what needs to be completed and the procedures to ensure the policy is put into practice (p. 103). Companies that clearly establish responsibilities for each board of director member and management are able to show …show more content…
292). The shareholders are only responsible for assigning directors and auditors to ensure a suitable governance structure is in place. Whereas, the board of directors is accountable for guaranteeing the corporation is abiding by the laws and regulations currently in place (Tihanyi, Graffin, & George, 2015, p. 1535). Furthermore, Kostova (2013) explains the main job of the board of directors is the evaluation of actions taken by members of the board of directors, assessment of their management skills, and their contribution to meeting shareholder’s anticipations (p. 363). In addition, the board of directors is to provide consistent direction over all of the company’s actions (p. 363). The board of directors also provides verification over the financial statements, documents, evaluates the management board’s indications on profit or loss distribution, and, lastly, the board compiles a written report of the results of these evaluations and presents it at the company’s annual meeting (p. 363). The board of directors main functions consist of defining the company’s risk profile, monitoring the company’s internal risk management process, setting corporate strategy, in addition to, supervision, consulting, decision-making, cooperation and

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