Corporate Accountability Essay Example | Topics and Well Written Essays - 2500 words

Corporate Accountability - Essay Example This is because a well governed organisation is visualised to be effective by stakeholders and thus initiates greater investment from them in the business. Often a management structure is used by organisations for conducting their operations. The concept is used as a framework of policies with the objective of protecting outside stakeholders’ investment in the organisation. Corporate governance is used by large organisations for generating a system of balances and checks. It provides the assurance that overextending of company’s resources is not generated by any individuals or departments. In other words, corporate governance helps in preventing both frauds and abuse from employees (Vitez, 2010). In this research paper, the various dimensions of corporate governance policy frameworks will be discussed with reference to followed principles in the UK and the US. ... ollow a market-based approach that provides flexibility to the companies in organising and exercising their responsibilities, while simultaneously ensuring their shareholders proper accountability. The accountability is maintained in the UK through â€Å"Combined Code on Corporate Governance† that works on the basis of ‘comply or explain’. This approach makes the judgments easy that is to be presented case after case. This form is supported by investors, companies and regulators in the UK and has been adopted in other financial markets as a model. The approaches in the UK towards corporate governance provide high standards combined with relatively lower costs of association. The board of the UK corporate governance presents assessment of position of the company and provides accountability for maintaining sound internal control system. The board is responsible for maintaining shareholders’ contact for understanding their concerns and opinions (Financial Repo rting Council, 2006). The code of the UK corporate governance consists of five main sections, namely, leadership, effectiveness, accountability, remuneration and relations with shareholders. With respect to leadership, companies are initiated to be lead by an effective board consisting of both executive as well as non-executive directors. In complying with the code ‘effectiveness’, companies should have an exact balance of experience, knowledge and skills. For pertaining to accountability, there should be proper assessment of the prospects and position of the companies. In case of remuneration, the payments of directors should be sufficient enough for attracting qualified candidates and lastly, the companies should bear a dialogue with shareholders on the basis of mutual understanding about its objectives