Role of Stakeholders in the Corporate Governance Process

Good corporate governance helps to ensure that corporations take into account the interests of a wide range of constituencies, as well as of the communities within which they operate, and that their boards are accountable to the company and the shareholders. This, in turn, helps to assure that corporations operate for the benefit of society as a whole.

Stakeholders typically include investors, managers and employees, customers, suppliers and other business partners, and local communities. Corporate governance is also enhanced by Regulatory and supervisory agencies, civil activists, and the media.

Employees' roles in corporate governance vary. Employees may me consulted on certain management decisions. Board members are expected to consider stakeholder interests while employees have the right to nominate and vote for board members or even have an employee sit on the board. Also, employees are often made shareholders of the organization in order to give them the power to elect the board and give them a sense of ownership in the company.

TRG Marketing, like CareNetWest, has a board that is not generally involved in risk management. Both companies suffered from failed risk management due to a lack of communication and management