The effective management of corporate governance is vital for the success and growth of your company. It’s a way to make sure that decisions are made in the best interest of the business and the shareholders’, and to guard against fraud and corruption. It allows the company to reach its financial and social goals while ensuring compliance with legal requirements such as environmental, social, and governance (ESG) best practices and other legal requirements.
The board of directors (BOD) is the most important participant in corporate governance. As such, BOD members are responsible for dictating policies within the company, while also determining plans and objectives, whereas management is responsible for implementing those goals. While the responsibilities of this job are usually financial, current trends are pushing for the BOD to assume more responsibility in areas like encouraging fair and equitable treatment of all stakeholders including shareholders, vendors employees, shareholders, and the local community.
Corporate governance is largely dependent on the creation and documentation of internal procedures and policies. These policies should reflect the culture of the organisation, be in line with legislation/regulations and help achieve its desired goals. The accessibility of policies will facilitate decision-making and aid the organization manage its risk appetite.
Another aspect of a good corporate governance is the creation of strategies for addressing future challenges and opportunities that the organisation may face. This includes the process of succession planning which is basically the management of talent. The goal is to secure the future of the company by establishing a strong leadership pipeline.