Corporate governance isn’t only for legal entities that are structured as corporations. They’re a framework that leaders must do more than follow through on well-planned strategic plans, they must also be fair and accountable to all stakeholders. Regardless of whether your business has one or many stakeholders–shareholders, employees, clients, students or the community–your company’s approach to governance will change over time and depend on your unique needs and context. However, there are some general principles that can be applied to any business, large or small:
Transparency is among the most crucial aspects of good corporate governance. Transparency is essential for board members and management to be open to auditors, shareholders and the public about financial reporting, accounting, key decisions, and internal processes. This means that the company should provide information on its social and environmental impact easily accessible to anyone who might be interested.
Another aspect of corporate governance is the www.boardroomdirect.blog/what-are-the-four-types-of-corporate-governance creation of clear roles and the responsibilities of your board. This can be done by creating job descriptions for the board, its chairperson and vice-chairperson, committees, and their chairs or by creating terms of reference for directors on their own. This will ensure that there are clear boundaries and limitations on authority, as well as a standardised set of responsibilities. It can help to create a culture of open communication and collaboration and also reduce the risk of errors and ensure compliance. It can also provide better opportunities for growth as your business expands and diversifies.