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It has been noted that Africa is lagging behind in terms of embracing and embedding corporate governance (CG) and sustainability in their enterprises. For them to be relevant in today’s business environment that is rapidly changing,
CG and sustainability are now the panacea to survival for all businesses across the globe. The western world has already started developing and implementing sustainability and corporate governance in their business operations.
Corporate Governance is defined by Brennaa & Solomon (2008) as a system of checks and balances, both internal and external to companies, which ensure that companies discharge their accountability to all their stakeholders and act in a socially responsible way in all areas of their business activity.
Sustainability focuses on meeting the needs of the present without compromising the ability of future generations to meet their needs. The concept of sustainability is composed of three pillars: economic, environmental, and social—also known informally as profits, planet, and people.
SUSTAINABILITY AND COPORATE GOVERNANCE
The nexus between sustainability and corporate governance is already well understood by scholars and other key stakeholders (government, private sector, academia, civil society and finance institutions.
It is now the duty of LEADERSHIP to foster the strategic direction of their organisations, executing strategy, managing risk, ensuring compliance, sustainability and this has the potential to upscale their enterprise in any environment. Those firms embarking on this journey will enjoy the low hanging fruits including:
- Better access to finance (Investors)
- Lower costs of capital- i.e. interest on loans
- Improved company performance – sustainability
- Higher firm valuation and share performance.
- Reduced risk of corporate crisis and scandals.
Conforming to sustainability and corporate governance helps start-ups, business owners, SMEs and entrepreneurs to differentiate themselves from their competitors thereby reduce business risk and improve the reputation.
S. Machisa (AFRISHEQ Solutions Consultancy) Email: afrisheqs@gmail.com
GMBA, GradSaiosh & Lead Auditor (IMS)
