Corporate Governance Role, Importance and Goals
Proceeding from the goals of the Authority to regulate the activity of securities in a fair, competitive, and transparent manner and to enhance the public awareness concerning the activity of securities and benefits, risks, and obligations related to investment in Securities and encouraging the development of such activity, along with providing traders in securities, thus, reducing frequent potential risks in this activity, therefore, the application of a full disclosure policy achieves fairness and transparency and prevents conflict of interest and exploitation of insider information. This will regulate the relationship between shareholders, Board of Directors, and executive management in shareholding companies.
The corporate governance rules are the principles, systems, and procedures that achieve the best protection and balance between interests of management companies, and those of shareholders, and other stakeholders related thereto. The key goal of applying corporate governance is to ensure that companies are in line with the shareholders’ goals, in a manner that enhances the confidence of investors in efficiency of company performance and ability to face crises.
Rules of corporate governance regulate the decision making process inside a company and stimulate transparency and credibility of such process. One of the most significant goals of adopting the rules of corporate governance are to protect shareholders and separate powers of the executive management which conduct business of such company, and the Board of Directors preparing and reviewing plans and policies in such company, in a manner that provides trust and enhances confidence in dealing. Such rules also enable shareholders and stakeholders to have an effective control on the company.