The types of processes and decision-making structures that promote the use of the principles described in sections 4 and 5 of the Standard will lead to Social Responsibility. The Organization has its decision-making processes and structures, some of them subject to laws and regulations, others more informal, according to the organizational culture itself.
It is up to each organization to put into practice these processes other mechanisms for the application of social responsibility practices.
Particularly since 2001, there has been a renewed interest in the issue of Corporate Governance, particularly due to the spectacular collapse of large US corporations such as Enron Corporation and Worldcom. In 2002, the U.S. government passed the Sarbannes-Oxley Act to restore general public confidence in corporate governance.
The eight main characteristics of "good governance":
Participation
Participation means that men and women should participate, without distinction, equally in the government activities of the Organization.
Participation should include the possibility of direct participation or indirect participation through institutions or legitimate representatives.
Participation implies the existence of freedom of expression and freedom of association on one side, and an organized civil society on the other.
The principle, although it seems utopian, is perfectly possible provided that there are clear and specific laws that guarantee the proposed terms; and there are state initiatives aimed at sustaining the terms.
Rule of law
Good governance requires a fair legal framework that applies to all citizens of the state regardless of their financial wealth, political power, social class, profession, race and gender. Good governance must ensure full protection of human rights, whether people belong to majorities or social, sexual, religious or ethnic minorities.
Good governance must ensure that the judiciary is independent of the executive and the legislature.
Good governance must ensure that police forces are impartial and incorruptible.
Transparency
More than "the obligation to inform", management must cultivate the "desire to inform", knowing that good internal and external communication, particularly when spontaneous, frank and quick, results in a climate of trust, both internally and in the company's relations with third parties. Communication should not be restricted to economic and financial performance, but should also contemplate the other factors (including intangible) that guide business action and that lead to the creation of value 4. Responsibility
Government institutions and the way they proceed are designed to serve members of society as a whole and not just privileged people.
The processes of government institutions are designed to respond to citizens' demands within a reasonable period of time.
Guidance by consensus
Decisions are made taking into account that different groups in society need to mediate their different interests. The objective of good governance in the search for consensus in social relations should be to reach agreement on the best path for society as a whole. In addition, decisions should also be taken taking into account how such a path can be pursued. This way of obtaining decisions requires a long-term perspective for sustainable human development to occur. This perspective is also necessary to achieve the objectives of this development.
Equality and inclusiveness
Good governance must ensure equality of all groups with regard to the objectives of society. The path proposed by the ruler should seek to promote the economic development of all social groups.
Decisions should ensure that all members of society feel part of it and do not feel excluded on their way into the future.
This approach requires that all groups, especially the most vulnerable, have the opportunity to maintain and improve their well-being.
Effectiveness and efficiency
Good governance must ensure that government processes and institutions produce results that meet society's needs while making the best possible use of the resources at their disposal.
Provision of accounts (accountability)
Government institutions, private sector institutions and civil society organizations should be auditable by the people of society and their institutional supporters. In general, they should be auditable by all those who will be affected by their decisions, acts and activities.
External links:
Portuguese Institute of Corporate Governance
Wikipedia