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Corporate Governance Concept
The Anglo-Saxon expression Corporate
Governance designates the way how enterprise organizations operate and
act whether internally, whether before financial markets and general
market. In the corporate governance structure are specified the rights
and the responsibilities of the several stakeholders in the company
being the administrators, managers, shareholders or others. Being
unanimous that good practices of corporate governance contribute for a
better performance of the companies, several types of efforts have been
developed in the sense of implementing them, especially in companies
listed on stock markets.
Corporate governance relies on three
fundamental pillars:
- Information: Should exist transparency
and all relevant information has to become public, whether being the
information referent to results, events, or any facts referent to the
company with interest for the financial community (investors,
shareholders, analysts) and for the community in general.
- Administration: In the company’s
administration should be represented the several interests, namely the
shareholders of reference, small shareholders, employees and even
elements without any special bond. On the other hand, should be avoided
conflicts of interest in the relation between the company’s
administrators and an important part of the salary should be dependent
from the obtained results.
- Control: Should exist an internal
control structure composed by independent elements of the Administration
(Tax Councils, Auditing Bodies, etc.) that assist the Administration
Council self in the fulfillment of their responsibilities of financial
information delivery, internal and external audit, internal control and
application of the existent codes of conduct.
Translated from Portuguese
by Susana Saraiva, Portuguese-English and English-Portuguese translation
specialist. Contact: spams@sapo.pt.
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