Commercial Law Attorneys
Corporate Governance
Corporate governance is a collection of rules concerning the manner of supervision and control over a corporation. A company’s governance is exercised through the activities of its board of directors and its internal and external audits. Corporate governance aims to create uniform management standards among public companies in order to prevent Ensure that these are carried out in a transparent and ethical manner in order to prevent financial crises of large corporations and to protect their stakeholders.
By Igal Mor, Adv. & Notary
Accuracy in Legal Advice. Excellence in legal support.
A brief background
Many countries have developed corporate governance policies over the past decade and continue to do so.. this Based on a belief that administrative and accounting scandals, such as those that have rocked the financial world in recent decades, should be prevented as much as possible.
Israel joined these countries when the Securities Authority appointed, in 2005, the Goshen Committee (headed by Prof. Zohar Goshen) whose purpose was to recommend a corporate governance code for public companies in Israel. In order to reach a consensus, the committee consulted with various professionals from public companiessuch as lawyers and accountants. After many discussions, the committee submitted recommendations that, in its view, form the basis for proper corporate governance.
A recommendation of the committee was to increase the independence of the company’s board of directors, which was implemented as part of Amendment 16 to the company’s charter. Among other things, this determines the number of independent directors from the total number of directors on the board, and that office bearers who are subordinate to the CEO will not serve on the board.. The purpose of these changes is to increase the independence of the board of directors, so that they may better monitor the activities of the company.
Corporate governance - what does it mean?
As mentioned beforehand, this is a set of principles and rules that are intended to create a management and control mechanism over the company. In practice it is The manner in which the board of directors supervises the company’s activities and ensures that financial and administrative controls are in place. A corporate governance system serves a two-fold purpose: firstly, it provides a framework for the development of protecting the stability of the business world and preventing accounting and managemerial scandals that in the past, different mechanisms had a difficulty exposing.. Secondly, to reduce the risk associated with investing in a public company for stakeholders, i.e. existing shareholders and potential investors. In addition, a successful corporate governance policy benefits the company’s reputation as well. The reason for this is that corporate policies have now become a central tool for ensuring proper corporate conduct, as opposed to poor corporate governance, which is viewed as a risk to the success of a company.
Management and director legal advice
Adv. Mor & Co.’s commercial law department has experience in representing various entrepreneurs, businesses, and corporations from Israel and abroad in a wide variety of legal areas.
