Governance
Governance refers to the structures, processes, practices, policies and rules that control and direct an organization and all corporate behaviour. For companies, establishing corporate governance means a balancing act of stakeholders and their respective interests in an effort to align company activities with them. Ideally, corporate governance creates a set of rules and controls that everyone in the company abides by in order to determine, set and reach company objectives.
Implicitly corporate governance also includes risk. Managing and monitoring activities within a company mitigates risk and manages behaviour in order to ensure corporate responsibility. It includes internal controls, performance management, reporting, disclosure, corporate values and data governance but that’s not all. A comprehensive approach to corporate governance puts all these processes within the larger social, regulatory and market environment.
Governance isn’t limited to corporate governance. Data governance refers to the controls and rules imposed in order to ensure that data isn’t unfairly manipulated or accidentally changed. As mentioned above, governance can extend to reporting controls, where a single version of data ensures that only one set of financials is represented in final reports. Governance is essential in audits, when auditors have questions about numbers. Governance features like record keeping, audit trails and logs ensure that communications and activities are transparent.