Corporate Governance – The Importance of Communication and Culture

Objectives: The purposefulness of the paper is to examine the significance of independence in corporate governance, issues and challenges that independent directors have to face and the importance of culture and communication. Analysis and Findings: The paper investigates how a firm’s governance maps between corporate governance and independent directors. Corporate Governance is a fundamental significance to an establishment as it undoubtedly augments a company’s image in the public. It is about establishing values and principles into every aspect of business. It acts as a pillar for the reliability and stability of any establishment. When performed successfully, it can prevent corporate humiliations, counterfeit, civil and criminal liabilities of the company. The importance of independence in corporate governance is vital and an essential component for efficiency. However, corporate governance structures differ from country to country and thus largely influenced by culture. Communication between management, independent directors, stakeholders, shareholders and customers who do not share a common language or culture can always become a concern. Further independent directors are perceived as the key boundary between management, then, they are understood as the marginal shareholders or stakeholders. Needless to state, to improve corporate governance independent directors with excellent business tactics, dedication, cultural tolerance and positive attitude are essential since this helps remarkably in the growth of a company. However, to achieve an effective role in protecting the company’s objective in terms of sustainable grow this a remarkable challenge. This is because of strong review from stakeholders, substantial demands imposed and an increase in overall difficulty of the business setting and cultural exchanges. The high competency of independent directors and understanding the cultural aspects of the country by management would make corporate governance a great success. If an implementation of effective corporate governance joined with communication and diversity awareness, the revenue and market share improves along with enhancing image of the business.