Three pillars of corporate governance

  • The three pillars of governance are corporate governance, due diligence and compliance programs.
  • Studies provide clear evidence of a link between economic development and corporate governance.
  • It is important is that the concepts of governance are understood as being an initial part of risk management and the responsibilities go to both the business entity and the individuals involved.

Three columns

It is a fundamental principle of good political governance to separate the three arms of government. The French philosopher, Montesquieu, developed the separation of powers theory, to illustrate that the legislature, executive and judiciary are the basic tenet of free and democratic societies. Within the world of corporate governance, there are a least three separate pillars or arms of governance, being, corporate governance, due diligence and compliance programs. The author over the last decade has also observed the move to international corporate governance for global entities and the growing importance of corporate social responsibility (CSR) or from an investor’s perspective, the ESG (environment, social & governance). In the last few years, the importance of information governance has also become critical.

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