Below is my opinion on corporate governance:
Problem Statement:
- Most corporations use many ways to avoid taxes. Even the corporate giants who monopolize the market but they pay a small amount of taxes
- Many corporations perform illegal activities or money laundries in the name of a business
Corporate Key Performance Indicator (KPI) database and dashboard
Establish a standard key financial statements framework including balance sheet, P&L, and cash flow
Request all registered corporations to submit their quarterly financial statements via a government upload portal
Request all registered corporations to submit their 5-10 years of historical records
Establish a list of key performance indicators. eg: TOP 18 FINANCIAL KPI EXAMPLES
Establish the year to year variances for trend analysis
Establish the baseline and benchmark by industry
Spot out and highlight the abnormal variance (exception increment or decrement)
Create a KPI intelligence dashboard for government officials to review
Request the corporation to submit explanatory documents for the exception or abnormal variances.
Revisit the corporate policies
Identify the taxation avoidance methods and counter policies. For example, income tax should be calculated based on a business entity, not the whole corporation. Corporations should bear their responsibility to pay taxes based on the actual earnings. They should not use the tax payment for unreal business investments.
Establish monitoring and auditing functions once the corporation exceeds the baseline
Establish restrictions on what corporations can or cannot do within different thresholds
Regulate the compensation and benefits of the management team based on the key financial KPIs