Governance

The term “governance” had emerged after the economic and financial crises occurred in some countries due to the mismanagement of major economic units. This term became associated with other terms such as privatization or globalization as new means and mechanisms to enhance the stability and growth of the market.
Governance is defined as the principles and rules that balance between  the interests of the company and the interests of shareholders and other stakeholders. The aim of these rules is to ensure that the right decisions are taken within the company to enhance the confidence of shareholders and investors in the efficiency and ability of the company to cope with crises.
Governance is based on three basic principles:
Principle 1: Transparency:
Transparency means that the Company should ensure that accurate, comprehensive and timely information is provided and that stakeholders, shareholders and investors can easily and periodically be informed of such information. This will contribute to enhancing shareholders’ trust in the Company and encouraging others to dealing with the company in the future.
Principle 2: Proper Administrative Organization:
One of the most important rules of governance is the proper administrative organization of the company, through the good distribution of tasks  and the separation of competencies in addition to the establishment of a system of incentives and rewards for evaluating the performance of employees in the company, whether managers or employees.
Principle 3: Internal control:
In order to ensure the proper management of the company, internal control and auditing mechanisms must be established to detect abuses and deviations when they occur in order to deal with them and control them, in addition to the need to establish legal means to hold  responsible who is behind of such violations .