A well-defined corporate governance structure helps to ensure fairness and transparency, helping your company cultivate an excellent relationship with shareholders and the community. It helps define roles, guarantees accountability, and permits compliance with regulations and laws. It also helps to ensure the long-term development of a company by aligning shareholder and management interests.
Corporate governance is a complex concept that is based on the goals and culture of your company. The most important things to be aware of are:
Unitary Board Structure
In this corporate governance system, the board of director is accountable for overseeing and making decisions about the activities of the company. The board comprises non-executive and executive directors. This kind of structure is prevalent in mid-sized and small businesses.
Continental Model
A two-tiered system, called the Continental model gives control to a board of management and the supervisory board. The management board is composed of insiders the most useful checklist for board meetings from the company, such as executives and managers. The supervisory board comprises outsiders, such as bankers and union representatives with stakes in the company.
Governance that is stakeholder-oriented
In contrast to traditional structures which focus on shareholder interests, this kind of governance structure takes into account the needs of all stakeholders including employees, customers and vendors as well as the community. It encourages boards to design effective engagement programs and to adopt policies that reflect the larger environmental and social concerns. The board must be transparent and open regarding its decision-making process and communicate this information to all parties. It should also ensure that there are clear lines of communication between the board, company management and shareholders.
