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Having a clear business purpose, socially acceptable behaviour and legal awareness are key fundamentalsSINGAPORE'S new Code of Corporate Governance will have been in place for a year this November.儲存倉 Corporate governance is high on the agenda for investors; there have been questions asked about areas such as malpractice and boardroom diversity and, in July this year, the Singapore National Employers' Federation (SNEF) launched a survey - due to report early next year - into the effects of gender diversity on corporate performance and governance.In the wake of the financial crisis, these issues faced close scrutiny in the global markets. Scandals, such as that over Libor (London interbank offered rate) fixing, rejections by shareholders of remuneration seen as excessive and the slow pace of gender diversity have all brought corporate governance into the spotlight. ICAEW has, therefore, launched a corporate governance thought leadership paper, asking fundamental questions about corporate governance; the first, published in April, asked What should companies be responsible for?While globalisation has changed companies, markets and the ways in which we do business, the thinking on corporate governance has not necessarily kept pace. There is, therefore, a misalignment between the framework used to guide companies, and the environments in which those companies operate.At the same time, as companies globalise, there are pressures to harmonise internationally the often diverse practices in corporate governance across the world. This is especially relevant for international trade and finance hubs such as Singapore, which must command the trust and confidence of businesses from many diverse regions. Improved corporate governance is, therefore, one way that businesses can demonstrate comparative strength internationally and continue to attract trade and investment. So what are the fundamental responsibilities of a company?A clear business purposeThe first responsibility of any company is to have and achieve a clear business purpose; one that iseasy to understand and can be clearly communicated internally and externally. Maximising profits and shareholder value is, in itself, not enough - a company that does not show respect to customers and employees will find it quickly loses trust and confidence. Having a clear business purpose may also pose a challenge for large conglomerates where the business purpose may appear inconsistent, ambiguous or even in conflict with other aspects of corporate identity.However, a responsible company should be able to explain what it stands for. This is not to say that companies should be so rigidly focused that they ignore fundamental changes to their environment. Innovation and adaptability are essential for companies that wish to stay in business - after all, the world does not stand still.Socially acceptableCompanies should also behave in a socially acceptable way. This will vary from country to country, but social norms will always set boundaries for what is acceptable behaviour from a company. But social norms,while generally understood, are often poorly articulated. They can also change, both through slow evolution or occasionally rapidly in the face of a significant event. Sometimes, for companies that originate overseas, they may appear unusual, or even extreme.The only way for compa迷你倉價錢ies to ensure that they are up-to-date with acceptable behaviour is continuous public engagement, and constant monitoring of trends and opinions, for example through popular media.This presents another challenge - when the media focuses on corporate behaviour it may well be that the focus (and the condemnation) flares up rapidly (criticising them for behaviour once seen as acceptable), not giving companies time to alter working practices and this is another reason why a keen weather eye should be kept on trends and directions of travel; companies need to stay one step ahead in order to protect their corporate reputations. This means, at times, that companies need to rise above short-lived social expectations and to take actions.Finally, it is important to remember that particular industries - financial services, for example - can develop their own culture, and what is acceptable within the industry may not seem acceptable to the public at large. Companies should, therefore, take time to consider how their working practices might appear to someone from outside the sector.Legal and regulatory requirementsCompanies should know they must meet legal and regulatory requirements relating to issues such as employment, health and safety, anti-corruption and taxation.These are, for the most part, a matter of public knowledge and failing to meet them will not only involve sanctions but will almost certainly lead to reputational damage. However, simple compliance is only the "baseline" minimum. If companies wish to safeguard their reputations, they may wish to go further.Also, it is worth considering what changes may happen in the law in the future. Given the costs and efforts involved in changing working practices, companies that are able to anticipate changes to the regulatory environment are in a good position.Stating how the responsibilities are metA key part of acting in a responsible way is being accountable. This means that companies should publicly acknowledge their responsibilities and also report on how effectively they are meeting them.By ensuring they understand the expectations of the public, as well as shareholders, customers, business partners and other stakeholders, they will be able to build long-term relationships. This also means that the efforts they put in to acting responsibly will bear fruit - since observers will be able to see that they are practising what they preach.Sound business decisionRecognising a wide range of responsibilities is ultimately a good business decision. Engaging in this way will mean companies are more able to identify changes in their operating environments and respond and adapt accordingly. It minimises the risk of an "expectation gap", where the public's view of how a company or industry should act diverges from the internal view.It also reduces the risk of heavy-handed regulation or legislation; regulatory measures are often used where it is perceived that companies have not acted responsibly, but it can be costly and is all too often a one-size-fits-all solution that fails to recognise important individual distinctions.But, most of all, this is a blueprint for building a long-term sustainable business. By acknowledging and fulfilling responsibilities, a company is laying a foundation for building and maintaining trust.The writer is regional director, ICAEW South East Asia迷你倉