The aspects of governance
Many factors determine the assessment of corporate governance according to ESG standards. A positive governance basically concerns transparency in corporate decisions, social and legal responsibility in the application of law and contrast to any form of corruption. Actually, these values are revealed by specific aspects of the whole and complex decision-making process of a company. First, social values need to be embodied by upper management running the company through an equitable composition of board of directors and supervisory authorities. From ESG perspective, the appointment process, as well as dynamics about executive compensation and career promotion need to occur in transparency and according to policies of meritocracy and gender and cultural parity. A diverse board offers wider perspectives, encourage innovation and better reflects the values of the community. Good governance also extends to a company’s responsibility towards stakeholders, both internal and external ones. To this end, transparent relationships, respect of individual rights, fair tax strategy, data privacy and protection with no information disclosure, precise accounting and regular auditing are some of the essential conditions to consider and guarantee to avoid any legal problem or financial loss and preserve business reputation, revenue and longevity.