Among the areas given vital attention is the improvement and enhancement of corporate governance requirements to ensure the integrity of businesses in the country, which in turn enable them to obtain and maintain public trust and confidence.
Corporate Governance efforts
A strong corporate governance framework serves as guide in enforcing and monitoring the regulatory activities of corporate entities. By virtue of the Corporations Act, the Australian Securities and Investments Commission (ASIC) may enforce civil and criminal penalties when the listing rules are breached. This is complemented by the Australian Securities Exchange (ASX), which works for the enforcement of Listing Rules and ASX Principles.
Being host to thousands of businesses and enterprises (both local and multi-national) may make it difficult to completely obliterate misconduct and offences, particularly in corporate governance.
Corporate Governance crimes
Corporate Board of Directors have both power and responsibility over matters concerning their organization. They receive remuneration and incentives, including the prestige of belonging to top corporations, for the services they render. In exchange for such privileges and benefits, they must fulfill certain obligations.
In this regard, involvement in activities that breach applicable and pertinent laws or actions that compromise the integrity of the companies one is connected with can lead to civil and criminal liabilities where the penalties and sanctions may range from fines to imprisonment, depending on the gravity of the offence.
Some of these corporate crimes include fraud, bribery, false accounting, tax evasions, cartels, and environmental issues. In some cases, negotiated outcomes and enforceable undertaking may be reached where the entities or personalities involved will be required to perform certain conditions and obligations to rectify the misconduct or offence.
The complex world of business is exposed to various threats and risks, which, if not mitigated or managed, may cause the collapse of corporate organizations and private individuals and professionals.
Why good Corporate Governance is important?
- Good corporate governance leads to fewer legal or ethical problems and better management, as it ensures that rules and regulations are in place to direct the actions of the organization’s leaders and key stakeholders.
- It can improve a company’s reputation, as publicizing their governance policies and how they work can encourage more stakeholders to work with them.
- It allows a company to remain compliant to local and national laws, rules, and regulations.
- It reduces fraud and conflicts, as the institution of rules limits instances of bad behavior from the employees, in turn reducing conflicts of interests and the potential for fraud.
The FC Lawyers Corporate Services team has the expertise to help your organisation develop good corporate governance, which in turn enables you to abide by government and market regulations and earn the trust of your major stakeholders.
If you have any questions regarding corporate governance, please contact us today.