Definition And Purpose
VGL defines Corporate Governance as a systemic process by which companies are directed and controlled to enhance their wealth generating capacity. Since large corporations employ vast quantum of societal resources, VGL believes that the governance process should ensure that these companies are managed in a manner that meets stakeholders aspirations and societal expectations.
VGL’s Corporate Governance initiative is based on two core principles. These are :
- Management must have the executive freedom to drive the enterprise forward without undue restraints; and
- This freedom of management should be exercised within a framework of effective accountability.
VGL believes that any meaningful policy on Corporate Governance must provide empowerment to the executive management of the Company, and simultaneously create a mechanism of checks and balances which ensures that the decision making powers vested in the executive management is not only not misused, but is used with care and responsibility to meet stakeholder aspirations and societal expectations.
From the above definition and core principles of Corporate Governance emerge the cornerstones of VGL’s governance philosophy, namely trusteeship, transparency, empowerment and accountability, control and ethical corporate citizenship. VGL believes that the practice of each of these leads to the creation of the right corporate culture in which the company is managed in a manner that fulfils the purpose of Corporate Governance.