Management comes after the governing body and is responsible of carrying out the routine operations of an organization. It supposes the responsibility to ensure that the strategic mission of the organization is being implemented and the decisions taken by the management are all in support of the goals and objectives of the board.
Management in an organization forms different levels with different functions. The duties and responsibilities of the managers are quite distinct from those of the board of directors. While the policies and directions are developed by the board, the managers take actions to implement them with and through their subordinates and employees.
Many skills are crucial for managers; for example, they need motivational skills so as to motivate their employees and develop a thriving working environment for all. Also, they should have good training skills so as to provide suitable training to their subordinates and to fresh recruits.
In general, management involves the following functions:
- Creating and implementing policies and strategies
- Developing and supervising yearly business plans
- Recruiting managers and staff members
- Backing policies established by the governing body
- Executing the decisions of the board
- Measuring performance of the organization
- Dealing with strategic and operational risk.
The term corporate governance refers to the use of best management practices, conforming to the law in its totality and following ethical standards for effectively managing and distributing wealth and exhibiting social responsibility to ensure a sustainable growth for all stakeholders. It is the mechanism through which organizations are guided and regulated so as to generate value for all those entities, firms and individuals whose interest is connected to the organization in some way.
Corporate governance establishes the rules and policies which define rights and assign responsibilities of participants performing at various levels of the organizations and exercise a control over its key procedures and processes for making sure that the things are carried out in the correct way.
An efficient governance brings transparency, ensures accountability and help create an environment of trust for boosting financial investment, business growth and overall stability. It deals with the steps and approaches that assure investors a satisfactory return on their investment.
The corporate governance basically starts with the shareholders who are the real owners and have the right to govern their company. However, in practice, shareholders pass this right to their elected directors who come together to develop organization’s by-laws or key policies based on its mission, vision and structure and decide upon the overall direction for the entity to serve and deal with its stakeholders. The governing body appoints the management and gives them guidance on various aspects to attain a smooth and successful functioning of their organization.
Functions of Corporate governance:
- Formulating the organizational mission
- Developing policies and strategies to be followed and carried out by all the participants
- Appointing management team and supervising its function
- Supervising overall organizational performance for the best interest of investors and other connected parties
- Offering insights and advices on key issues and their best fixes
- Recognizing, identifying and managing risks and crisis in a strategic manner
- Enabling organizations to adopt changes and survive in a new and unseen circumstances
- Ensuring compliance with the government regulations
- Minimizing corruption, wastage and mismanagement
|Designing & Developing the policy and strategies of an organization||Looking after the routine operations and implement of the organization to ensure they are consistent with the organizational mission|
|Governing the organization||Managing the organization|
|By shareholders by votes in AGM meetings||By the board of directors|
|Vision of the organization||Taking decisions to ensure the policies determined by the governing body are followed|
|Strategy formulation and vision-oriented||Task-oriented function|
|Board of directors||Executives and managers|