Corporate Governance and Human Source

What is Corporate Governance?

Corporate governance is a system encompassing the management and control mechanisms of a company. It can be defined as a set of rules, practices, and processes aimed at ensuring that companies achieve their goals in a transparent and ethical manner. One of the most critical stakeholders in this system is the employees. Their engagement, motivation, and performance are crucial for the company's success. The fundamental elements of corporate governance include:

Shareholder Rights and Equitable Treatment: Protecting the rights of all shareholders and ensuring they are treated equally.

Transparency and Disclosure: Accurately and timely disclosing company activities and financial status.

Board of Directors’ Responsibility: Ensuring the board of directors works effectively in line with company strategies.

Role of Stakeholders: Protecting the rights of all company stakeholders and ensuring their participation in the decision-making processes. This includes all employees under this heading.

Ethical and Legal Compliance: Adhering to ethical rules and legal regulations in all company operations.

The Role of Stakeholders and Ethical Legal Compliance

Among the fundamental elements of corporate governance, the roles of stakeholders and ethical legal compliance often rank lower in priority compared to the responsibilities of the board of directors, shareholder rights, and transparency. However, these two elements have a significant impact on human resources management and overall corporate sustainability. Employees, as one of the most important stakeholders, play a pivotal role in the company's long-term success and sustainability.

Active participation of stakeholders, particularly employees, in decision-making processes ensures that the company fulfills its social responsibilities and establishes a sustainable business model. Similarly, ethical and legal compliance is crucial for maintaining reliability and reputation in all company operations. Neglecting these values can adversely affect the company's performance and sustainability in the long run, leading to economically challenging outcomes.

Human Resources Sustainability

Sustainability in companies is not limited to environmental and economic factors; the management of human resources is also a critical part of this process. As a component of corporate governance, providing active or passive support to the right people is vital for long-term success. However, actively or passively supporting or encouraging the wrong individuals can lead to the loss of valuable employees or a decrease in their motivation.

Negative Effects of Wrongful Support

Loss of Motivation: Active support or passive tolerance given to the wrong individuals can decrease the motivation of talented and motivated employees. Failing to warn an underperforming employee undermines the sense of fairness among other employees, leading to a loss of motivation. This situation affects not only the underperforming employee but also the performance and job satisfaction of other employees, impacting the entire department and, eventually, the entire company.

Employee Turnover Rate: Valuable employees may feel undervalued in the face of unjust support and tend to leave the company. This leads to a high turnover rate and increased recruitment costs. The loss of talented and experienced employees, in particular, can reduce the company's knowledge base and competitive strength.

Sense of Belonging and Willingness to Work: Tolerance shown to the wrong people can destroy the sense of belonging and willingness to work among the right people. This negatively affects employee performance and loyalty to the company. A decreased sense of belonging can lead employees to exert only minimal effort and avoid innovative thinking.

Corporate Culture: Supporting the wrong individuals can cause disruptions in the corporate culture. This undermines the company's ethical values and reliability. Damage to the corporate culture can adversely affect the company's brand value and reputation in the long run.

Productivity and Innovation: Wrongful support prevents the right people from fully utilizing their potential and stifles innovation within the company. Reduced innovation can lead to a loss of market share and decreased competitiveness.

Recommendations for Sustainable Human Resources Management

Fair Evaluation: Evaluate employees' performance based on objective criteria and act fairly in the rewarding process. A fair performance evaluation system enhances employee motivation and strengthens the loyalty of talented individuals to the company.

Transparent Communication: Establish open and transparent communication with employees. Clearly explain the reasons for support and encouragement. Transparent communication reinforces employees' sense of trust and prevents workplace gossip.

Training and Development: Provide equal opportunities for all employees to develop their talents through necessary training and resources. Continuous training and development opportunities increase employees' skills and maintain the company's competitive edge.

Ethical Values: Instill corporate ethical values in all employees and continuously emphasize these values. Ethical values protect the company's internal and external reputation and ensure that employees engage in correct behavior.

Participatory Management: Involving employees in decision-making processes strengthens their bond with the company and enhances their sense of belonging. Participatory management encourages employees to contribute more to company goals and fosters innovative thinking. It also offers an opportunity for employees to empathize with the challenges faced by management in decision-making processes.

Conclusion

Sustainability in human resources, as part of corporate governance, is a key element guaranteeing the long-term success of companies. Preventing active support and passive tolerance for the wrong individuals, while encouraging loyalty through incentives for the right people, is crucial for establishing a sustainable business model. Elements such as fair evaluation, transparent communication, training and development opportunities, adoption of ethical values, and participatory management support the sustainability of human resources management, thereby contributing to the success of the company.