Good corporate governance is one of the most important prerequisite requirements for attracting equity capital that can contribute to domestic sustainable growth and development.
Corporate bodies play a significant role in wealth creation in the modern world as they are the key creators of economic value and employment. The way these organisations are governed remain crucial to a country’s economic development agenda.
In the quest for promoting economic growth and inclusive development in a country, institutions must build an environment of trust, transparency, and accountability necessary for fostering long-term investment, financial stability, and business integrity.
To promote an enabling environment for businesses growth and proper management of institutions, there is a need to prioritise the practice of good corporate governance which leads to efficiency and effectiveness of institutions.
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Better governed companies are less likely to bribe regulators. This is because they comply with the relevant laws within the jurisdictions they operate in while poorly managed and governed institutions are likely to fall. It is worth noting that several initiatives have been put forward by the Institute of Certified Secretaries (ICS) that promote good governance in both public and private sectors, according to CAP 534 of the Laws of Kenya.
The Institute has developed governance codes and standards that have been published with a view to ensuring that good governance is entrenched and practiced in Kenya.
In addition, the Institute trains and accredits governance auditors.
These conduct governance audits that examine the status of adoption of governance standards by the listed firms State entities.
There is also the Champions of Governance Award which is a governance assessment exercise that awards the best Institutions and Professionals who are deemed to have adopted and practiced governance codes and standards, among others.
In conclusion, the role that good corporate governance plays in economic growth and development cannot be overlooked.
It is incumbent upon all organisations both private and public to promote the practice of good corporate governance by adopting the best practices and most importantly the principles of corporate governance.
-Mr Gilbert Kiprono is the Manager, Research and Business Development, Institute of Certified Secretaries