Corporate governance is essential to the growth and success of your company. It’s a way to make sure that decisions are made in the best interest of the company and the shareholders’, and also to safeguard against mismanagement and corruption. It allows the company to reach its financial and social goals while adhering to legal requirements Environmental, social and governance (ESG), best practices and other legal requirements.
The board of directors (BOD) is the primary actor in corporate governance. BOD members are in charge of setting company policies, and setting goals and objectives. Management is then responsible for implementing these goals. While the responsibilities associated with this role are usually financial, current trends are pushing the BOD to assume more responsibility in areas like the promotion of fair and equitable treatment of stakeholders such as shareholders, vendors, employees, and the local community.
Corporate governance is heavily dependent on the creation and documentation of internal processes and policies. These policies should reflect the culture of the organisation, be in line with legislation/regulations and help achieve its desired goals. The availability of policies will also assist in streamlined decision-making and improve the risk appetite of the company.
Another aspect of good corporate governance is the development of strategies for addressing future challenges and opportunities that the organisation may face. This is a process referred to as succession planning, which is basically managing talent with the goal of ensuring that the company is ready for the future by establishing a strong leadership pipeline.