Summary of major corporate governance principles and best practices

Abstract

This paper summarises overall minimum corporate governance principles and best practices applicable to all organisations (whether public, private or nonprofit). These best practices are divided as follows:

• structure of the board of directors;

• operation of the board of directors and

• other corporate governance practices.

This paper discusses certain current best practices as advocated by corporate governance groups and practiced by some Fortune 100 public companies, with the understanding that best practices tend to evolve over time. We proceed on the assumption that a ‘best practice’ is one in which the benefits to the organisation substantially exceed the cost of implementation. What is a best practice today may not be a best practice in the future. Although the paper is addressed primarily to US-based organisations, the general principles are applicable to foreign entities as well, although modifications must be made to account for legal and cultural differences.