Transparency

A principle of good governance is that stakeholders should be informed about the company’s activities, what it plans to do in the future and any risks involved in its business strategies.

Transparency means openness, a willingness by the company to provide clear information to shareholders and other stakeholders. For example, transparency refers to the openness and willingness to disclose financial performance figures which are truthful and accurate.

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Disclosure of material matters concerning the organisation’s performance and activities should be timely and accurate to ensure that all investors have access to clear, factual information which accurately reflects the financial, social and environmental position of the organisation. Organisations should clarify and make publicly known the roles and responsibilities of the board and management to provide shareholders with a level of accountability.

 

Transparency ensures that stakeholders can have confidence in the decision-making and management processes of a company.

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Accountability

Corporate accountability refers to the obligation and responsibility to give an explanation or reason for the company’s actions and conduct. 

In brief:

• The board should present a balanced and understandable assessment of the company’s position and prospects;

• The board is responsible for determining the nature and extent of the significant risks it is willing to take;

• The board should maintain sound risk management and internal control systems;

• The board should establish formal and transparent arrangements for corporate reporting and risk management and for maintaining an appropriate relationship with the company’s auditor, and

• The board should communicate with stakeholders at regular intervals, a fair, balanced and understandable assessment of how the company is achieving its business purpose.

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Responsibility

The Board of Directors are given authority to act on behalf of the company.

They should therefore accept full responsibility for the powers that it is given and the authority that it exercises. The Board of Directors are responsible for overseeing the management of the business, affairs of the company, appointing the chief executive and monitoring the performance of the company. In doing so, it is required to act in the best interests of the company.

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Accountability goes hand in hand with responsibility. The Board of Directors should be made accountable to the shareholders for the way in which the company has carried out its responsibilities.

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Independency

In managing the business, Company always emphasizes professionalism and free from influence of any parties which contradicts laws and fair corporate principles. Meanwhile in decision making, Company’s Organs always strive to avoid conflict of interest and influence from any parties.

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Fairness

Fairness refers to equal treatment. Some companies prefer to have a shareholder agreement, which can include more extensive and effective minority protection.

 

In addition to shareholders, there should also be fairness in the treatment of all stakeholders including employees, communities and public officials.

 

The fairer the entity appears to stakeholders, the more likely it is that it can survive the pressure of interested parties.

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