Good corporate governance: responding to today's new business environment.

• Author: Carpenter, Gina M.

Just as education is an important component of the Cooperative Principles, training and education are important parts of the overall programs and services Jackson Energy offers to its employees. The cooperative provides reimbursement for college classes and expenses, and several employees take advantage of this benefit. Gina Carpenter is one of those employees. Carpenter has used her college courses to increase her responsibilities at Jackson Energy. She currently handles all of the financial duties for our subsidiary, Jackson Service Plus.

Donald Schaefer, President and CEO, Jackson Energy Cooperative

Introduction

While many businesses have been examining ethical procedures and policies for some time, corporate scandals such as Enron and WorldCom, have caused organizations to re-evaluate their operating procedures. Government acts, such as the Sarbanes-Oxley Act of 2002, have encouraged companies to develop highly accountable ethics and financial standards in order to avoid punishment. One way that companies are responding to the ethical crisis in the corporate world, as well as government regulations, is through the implementation of Chief Risk Officers to evaluate and correct risk factors that would place the company in an ethical quandary.

CORPORATE GOVERNANCE

Judith Burns, reporter for the Dow Jones Newswire, defines corporate governance as "a hefty-sounding phrase that really just means oversight of a company's management-making sure the business is run well and investors are treated fairly." Corporate governance is an extension of business ethics. Once the "right thing to do" is determined, it is the duty of directors and trustees to monitor the activities of management, and the corporation as a whole, to ensure the business is operated in an ethical manner. Burns reflects on the importance of a board that is made up of members who own large quantities of stock and are independent of the corporation itself, in regard to separation from management.

Several individuals, groups and agencies play a significant role in the governance of corporations, and these roles are filled both internally and externally. Judith Burns (2003) lists internal players as board members and senior management, while also defining several external individuals and groups, such as outside auditors, state and federal regulatory agencies, criminal prosecutors, legislators and the court system. Burns also notes that investors play a significant role in corporate...