To measure the effectiveness of corporate governance, focus should be on the corporate governance outcome.
Legasis approach to measuring effectiveness of corporate governance is based on the how well the organisation is functioning based on the policies, processes and procedures that it has in place and whether
the rights of the shareholders are being considered and upheld which goes beyond compliance. The three broad areas looked at are:
- Evaluating the board members to check their capacity to address the main challenges the company is likely to face
- Whether relevant and timely information is presented to the Board
- The impact of a board’s decisions on output measures including customer, employee, stakeholder will be evaluated