Corporate governance is a cornerstone for the success and sustainability of any company. It consists of a set of rules and policies that regulate the relationships between shareholders, the board of directors, executive management, and stakeholders. But how can these mechanisms enhance transparency, improve efficiency, and support sustainable growth?

Why is Corporate Governance Important for Business Success?
Corporate governance is a fundamental pillar for business success and sustainability, as it provides the framework that defines how a company is managed and directed, ensuring a balance between the interests of shareholders, management, and other stakeholders. Its importance is highlighted in the following aspects:

1. Enhancing trust and credibility.
2. Achieving transparency and accountability.
3. Effective risk management.
4. Attracting investments and capital.
5. Ensuring sustainability and growth.

How Does Corporate Governance Protect Shareholders’ Rights and Interests?
Corporate governance contributes to protecting shareholders’ rights and interests by establishing a regulatory and oversight framework that ensures fairness, transparency, and accountability, through the following mechanisms:

1. Ensuring fairness and equality.
2. Enhancing transparency and disclosure.
3. Mechanisms for participation in decision-making.
4. Accountability and oversight.
5. Protection against conflicts of interest.

What Are the Fundamental Principles of Corporate Governance?
Corporate governance is based on a set of fundamental principles that provide a framework for prudent and effective management, ensuring a balance between the interests of all relevant parties. The most prominent of these principles are:

1. Transparency.
2. Accountability.
3. Fairness.
4. Responsibility.
5. Independence.
6. Social responsibility and sustainability.

What Are the Internal Corporate Governance Mechanisms?
Internal corporate governance mechanisms consist of a set of tools and organizational structures that ensure proper management and oversight within the company. The most prominent of these include:

1. Board of Directors.
2. Committees and departments reporting to the board (e.g., Audit Committee, Risk Management, Nomination and Remuneration).
3. Internal policies and regulations.
4. Internal control and audit systems.
5. Clear organizational structure.
6. Mechanisms for accountability and disclosure.

What Are the External Corporate Governance Mechanisms?
External corporate governance mechanisms consist of the frameworks and entities outside the company that enhance its discipline and compliance. The most prominent of these include:

1. Relevant laws and regulations.
2. Regulatory authorities.
3. External auditing.
4. Shareholders’ and stakeholders’ rights.
5. Competitive market mechanisms.

What is the Difference Between Internal and External Governance?
The difference between internal and external governance lies in their scope and tools:

• Internal Governance: Mechanisms established within the company, such as the Board of Directors, specialized departments, internal policies, and internal controls, aimed at regulating performance and protecting shareholders’ interests from within the entity.
• External Governance: Mechanisms imposed from outside the company, such as laws and regulations, regulatory authorities, external auditing, and financial market requirements, to ensure the company’s compliance with transparency and statutory provisions.

What Are the Main Challenges Facing the Implementation of Governance?
The main challenges facing the implementation of governance include:

• Low awareness of governance concepts and their importance.
• Conflicts of interest within boards of directors.
• Deficiencies in transparency and disclosure.
• Resistance to change and weak compliance with regulations.
• Lack of specialized skills and expertise.

How Can Law Firms Support the Implementation of Governance?
Law firms can support the implementation of governance by:

• Providing legal advice to design internal governance policies.
• Reviewing contracts and regulations to ensure compliance with relevant laws and regulations.
• Training management and board members on best practices.
• Assisting in the preparation of disclosure and compliance reports.
• Supporting internal control procedures and resolving legal disputes related to governance.

🔹 Conclusion:
Can companies truly succeed without applying both internal and external governance mechanisms? The answer is no. Commitment to governance ensures transparency, protects shareholders, and lays the foundation for sustainable growth.