Factors affecting corporate governance

Factors affecting corporate governance that you may not know

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You may not know, corporate governance is a process, a story that is not simple at all. Of course, the corporate governance process will be affected by many different sides and factors. In the article below, Johnson's Blog Will let you know factors affecting corporate governance which you may not have known. 

General Meeting of Shareholders influence corporate governance

The first factor that affects the process corporate governance is corporate shareholder meeting. And of course, the corporate governance process will need to ensure the rights of the shareholders' meeting. 

In general, all shareholders should be treated fairly whether they are foreign or minority shareholders. If their rights are infringed, they should be given the maximum chance of receiving a fair compensation. 

All shareholders who own the same class of shares should have the right to vote, and be treated equally. 

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Administrative Council influence corporate governance

Members in corporate board of directors shall be able to exercise its rights through meetings and shall be recorded in the minutes of such meetings. 

The Board of Directors also has an extremely important function that is to resolve conflicts between shareholders and managers by making decisions to serve the best interests as well as all shareholders of the company. company.

Not only that, the board of directors will also have to monitor the strategic business activities, in addition to observe, evaluate and reward the company's management activities. In addition, the consistency of the accounting system along with the financial statements will be ensured by the board of directors.

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Executive management process influence corporate governance

The framework of corporate governance in the company needs to take measures to handle violations related to the rights of persons protected by law. 

Information about income levels or transactions involving the personal interests of executives or controlling shareholders will need to be made public.

Information disclosure and transparency

Transparency in the financial or business situation of a business is indeed increasingly important in monitoring executives. 

This is also a factor for an investor to evaluate the performance of that business. They will be assured of the assets they have invested when the profiteering acts will be controlled and governed by the law. 

Corporate governance There should be regulations on the most timely and accurate disclosure of information related to important issues of that company. This information needs to be carefully prepared based on accounting and financial standards. 

Independent auditors will perform annual audits to keep the objectivity of the construction as well as the content inside the financial statements of the enterprise.

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Human resource management in the enterprise 

In corporate governance, whether human resources are well managed or not also plays a very important role, so the human resource management process is affected by what factors?

External environment

The development from science and technology will force businesses to invest in higher human resource training costs. 

Today, businesses need to pay more attention to the working environment as well as the rights of employees when affected by the legal system.

Not only that, cultural and social factors will have certain impacts on not only production and business activities but also on human resource management of the company. 

Regarding the level of competition in the market, human resources are the resources that help the company develop. Enterprises must have good remuneration regimes to retain employees and avoid losing talents. 

Internal environment 

The leadership as well as the goals of the business will be an extremely important basis for promoting the development of the company in general and the human resources in particular. 

In addition, human resource management is also affected by the culture inside the business, the policies or regulations inside the business. 

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Johnson Vu – Deputy General Director of Viindoo Technology Joint Stock Company

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