Principles of Corporate Governance

Good corporate governance is generally organised around a small set of widely recognised principles:

1. Transparency: Timely, accurate and adequate disclosure of all material information about the company's financial position, performance, ownership and governance, so shareholders and the market can make informed decisions.

2. Accountability: The Board of Directors is accountable to shareholders for the company's performance and conduct, and management is, in turn, accountable to the Board.

3. Fairness: Equitable treatment of all shareholders, including minority and foreign shareholders, and fair treatment of other stakeholders such as employees and creditors.

4. Independence: The Board should include a sufficient proportion of independent directors — directors with no material pecuniary or other relationship with the company that could compromise their objective judgment — so that management's decisions and performance are genuinely, independently scrutinised.

5. Responsibility: The Board must take responsibility for the company's strategy, risk management and compliance with law, rather than functioning as a mere formality. …