Corporate governance is a term referred to by MBA students and professionals who are concerned about an Enron-type corporate crisis. A corporate governance program seeks to balance the powers of shareholders, board of directors members and other players affecting the corporate structure. This balance is achieved through being proactive as opposed to simply being reactive.

Many scholars and business people have come up with creative and effective ways to deliver corporate governance solutions to small and large, public and private corporations. These solutions are attainable and will enhance both institutional investors' confidence through accurate financial disclosures and Board accountability.

The following list will aid in finding corporate governence solutions:

1. Develop a corporate governance program to ensure greater accountability and balance of power.

2. Affect the laws by being proactive.

3. Evaluate the corporation's controls throughout the process.

Action Steps
The best contacts and resources to help you get it done

Use professionals to develop a corporate governance program

Corporate governance is striving for harmony between the corporate players in order to succeed in the corporation's mission. These players include the board of directors, management, shareholders, employees, regulatory participants and several other players. This balancing of powers, responsibilities and clear delineated checks and balances enhances investor confidence. A company with a professional corporate governance program is a company aimed toward success.

I recommend: Hire a law firm with corporate governance program experience. One could take a course on Abanet.org and learn all there is to learn about corporate law, regulations and politics, or one could take the easier road and allow the experts to do the work. Contact a securities attorney through LexisNexis' lawyer search website. Have the attorney explain the charter and bylaws to you, the current laws affecting your business and possible solutions to creating your corporate governance program. Creating effective corporate governance programs should involve a combination of internal and external professionals.

Participate in lawmaking panels and educational resources that affect your business

Lawmakers seek out corporate executives, shareholders and those affected by corporate fraud to educate them on the current corporate governance application. After Enron, WorldComm and the other newsworthy corporate accounting disasters, Congress and other regulating bodies increased their listening ears to corporate players.

I recommend: Participate in panels discussing the affects of proposed legislation affecting your business. Attend the National Association of Corporate Directors' annual conference and online forums to learn and discuss issues surrounding corporate governance performance. Attend U.S. Securities and Exchange Commission (SEC) events. Get to know the committee members in Congress who affect your business and maintain an open dialogue.

Learn how to evaluate what corporate controls are in place

Corporate controls and corporate governance compliance programs are conducted throughout the company. It is not a matter of writing more manuals and getting managements opinion. For best results, involve the entire company in the process. Be sensitive toward shareholder rights, and cautious about too much shareholder activism. Monitor corporate governance performance. Utilize corporate governance software to assist you in setting up your program.

I recommend: Involve the entire company from the board, to management, to employees. Spearhead the evaluation by appointing one or two persons to be in charge of the project. Choose individuals with a finance, internal controls background and a widespread understanding of the company's operations. Maintain a corporate governance database. Take a CobiT course to learn more about IT controls. Learn more about internal controls through COSO. Consider using corporate compliance solution software such as that of EcomNets.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Find additional corporate governance information through auditors and other accounting professionals you work with on a regular basis.