Introduction
Corporate governance refers to the practices that are implemented on business organizations in order to improve the relationship between all their customers, stakeholders as well as partners. There are different challenges and issues in every business and it is important to maintain effective practices to help the business in facing the same. Such practices ensure that all the business practices are transparent that reduces mismanagement at workplace and if anything wrong will happen then all the top level management people will be liable. Corporate governance helps in improving the routine business practices and leads in sustainable growth of the organization.
Features of corporate governance:
Unambiguous business strategies- Corporate governance helps an organization in framing feasible strategies so that the goals of the business can be accomplished. It also provides assistance to the managers in creating marketing strategies to communicate the management practices among general public.
Risk Management-Corporate governance helps in risk management as it helps in creating policies regarding risk management to detect the risk possibilities in business. It also assists in increasing the performance of the organization.
Social Responsibility- Corporate governance practice helps the organization to create a good relationship with the customers by providing the best services and implement improvements according to their feedbacks (Kochan & Schmalensee, 2003).
Transparency- It is important to have transparency in the organization. Effective corporate governance practices help an organization in unifying the business process. By unifying the process, it helps the customers to track and notice the performance of the organization. Transparent business relationship is always good as it increases the trust and reliability among customers.
I have a work experience of two years in ICICI Bank. This experience made me learnt so many things about corporate governance that helps in growing business activities. It basically enables transparency in the organization by organizing regular meetings with stakeholders.
Enterprise Risk Management
Enterprise Risk management refers to the business practices for that helps in determining, analyzing all the challenges and issues that can create negative impact on the business activities. It enables the organization to create strategies for future preparations for upcoming risks. It is necessary to make strategies to safeguard the organization from upcoming future events. There are some management practices in every organization that utilize tools and techniques to analyze different types of risks. This process increases security aspects for customers at workplace (Harjoto, 2017). There are managerial policies that are mainly responsible to increase performance. Effective enterprise plays a very important role in analyzing the risk and creating proper strategies for the same.
Features of risk management
Proper framework- There is different business domains that a business platform deploys. The effective risk management strategies are formed and implemented due to the risk attached with each business unit. Enterprise risk platform should be flexible enough and capable of doing the analysis of current as well as future risk possibility (Schreck, 2009). As per the international compliances and standards, the enterprise risk policy should comply with the current standards of the government. This standardization in policies helps in optimum utilization and consumption of resources. All the policies related to risk management should be ISO 31000:200 certified.
Effective organization strategies: Risk management helps in creating effective strategies for the organization as after assessing the risk, it becomes so clear that which types of strategies needs to be prepared for facing future uncertainties. These strategies also help in improving relationships with the customers. Organizations not only depend upon the formation of strategies as deployment in an effective manner is also very important.
Business performance management: Proper policies regarding risk management always helps in improving performance of business by conducting timely control audits so that customers can get the best quality products (Trong Tuan, 2012).
One of my cousins helmed me to understand the importance of risk management strategies. He works in HVL Company as a junior level project manager. He mentioned that his company was in the condition of huge loss and the higher authorities do not even know the root cause for the same.
So, afterwards my cousin started looking into this as he is from management background and recommended risk management practices to the top level management. Risk management strategies helped the organization in finding out the root cause and then took action to resolve this (Campling, 2008).
Relation Between Corporate Governance, Risk Management And Corporate Social Responsibilities
Corporate governance- It refers to a process that helps in the interaction of the business operations and distinct business delegates. All the management practice pays a very important role in fulfilling the goals and objectives of the organization. Managerial practices directly assist an organization in optimal utilization of resources and control management practices (Schreck, 2009).
Risk Management- Risk management is a process of assessing future upcoming risks and develops strategies for the same. These strategies help in facing the risk in an efficient way. These practices help in achieving goals and objectives. There should be good policies and practices that can actually worth for the business.
Corporate social responsibility- Corporate social responsibility are known as the self- control management tactics that helps in analyzing and monitoring policies of the business. CSR policies should be according to the business laws and regulations. These strategies are very important for the business in decision making (Allouche, 2007).
Benefits of corporate social responsibility:
Cost effective- Good strategies for corporate social responsibility are created for making sure that the business platform can become cost effective. It basically deals with minimization of business risks in the business and hiring talented and potential staff members.
Good business opportunities- Corporate social responsibility helps in creating many business opportunities. It basically associated with finding out new potential customers.
Customer Satisfaction- If all the business policies and corporate social responsibility are well planned then it helps in increasing customer’s satisfaction by providing them good quality products and services.
Organization governance and organizational management
According to both the concepts, it has been concluded that both organization governance and organization management are different concepts and they are important in their own parameters.
Organization governance
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Organizational management
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It includes all the practices handled by manager for controlling the internal operations of an organization (Allen & Craig, 2016).
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The managerial practices are very important to control the business as a whole including internal as well as external operations
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These strategies are basically used in handling organizational operations.
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These strategies help an organization to organize distinct operations of business.
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With the help of these practices, an organization can develop leadership and effective communication skills in their employees.
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These practices help in creating goals and objectives of the organization.
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When I visited Nepal last year, I had an interview with MR. Chaudhary. He is the CEO of an Agriculture based industry. He mentioned to everyone from past few years that his company is suffering from crisis and to resolve the same, he implemented corporate governance practices. By adopting the practices, he realized that the performance of the company has started rising and market reputation has also improved. Mr. Chaudhary suggested by his own experience that managerial practices are helpful in conducting regular meetings with all stakeholders to have a discussion on different issues found by them.
References
Allen, M., & Craig, C. (2016). Rethinking corporate social responsibility in the age of climate change: a communication perspective. International Journal Of Corporate Social Responsibility, 1(1). doi: 10.1186/s40991-016-0002-8
Allouche, J. (2007). Corporate social responsibility. Hampshire: Palgrave Macmillan.
Campling, J. (2008). Management. Milton, Qld.: John Wiley & Sons Australia.
Harjoto, M. (2017). Corporate social responsibility and corporate fraud. Social Responsibility Journal, 13(4), 762-779. doi: 10.1108/srj-09-2016-0166
Kochan, T., & Schmalensee, R. (2003). Management. Cambridge, Mass: MIT Press.
Schreck, P. (2009). The Business Case for Corporate Social Responsibility. Heidelberg: Physica-Verlag HD.
Schreck, P. (2009). The Business Case for Corporate Social Responsibility. Heidelberg: Physica-Verlag HD.
Trong Tuan, L. (2012). Corporate social responsibility, ethics, and corporate governance. Social Responsibility Journal, 8(4), 547-560. doi: 10.1108/17471111211272110