Essentials of Corporate Governance

Chapter 8. Changes Made Through Corporate Governance

After reading this chapter, you will

• Understand areas recommended for Corporate Governance attention

• Understand whistle-blowing procedures

• Understand the value codes of ethics

• Understand performance evaluations

• Understand the director election process

When a company starts to evaluate and revise its governance strategies, the first requirement is that the corporation’s structure facilitates change. This means that the board and the executive must be organized in a manner conducive to establishing new guidelines and must not be burdened by entrenchment.

As the corporation begins moving toward good Corporate Governance, some of the areas it will address include the establishment of whistle-blowing procedures and protection, the creation of one or more ethics codes, restructuring of board and executive evaluation and compensation strategies, and assessment of the director nomination and election process.

Whistle-blower Procedures

The term “whistle-blowing” applies to the actions of any company member who exposes a perceived wrongdoing that is occurring within the organization.

Importance of the Whistle-blower

Two types of impressions surround whistle-blowing. On one hand, there are those who value whistle-blowers and view them as brave people trying to combat corruption and unethical behavior. On the other hand, some still view whistle-blowers with contempt and consider them traitors to their company or colleagues.

There is no reason why this ...