A well-defined www.boardroomdirect.blog/the-most-useful-checklist-for-board-meetings corporate governance system helps to ensure fairness and transparency which helps your company build an enduring relationship with its shareholders and the community. It helps determine roles and responsibilities, ensures accountability and helps ensure compliance with the law and regulations. It also assists in implementing a company’s long-term growth strategy by aligning the interests of shareholders with the interests of the board as well as management.
Corporate governance is a complicated concept that is based on the objectives and the culture of your company. Keep in mind the following essential concepts:
Unitary Board Structure
In this corporate governance system, the board of director is responsible for overseeing and making decisions regarding the company’s activities. The board is comprised of both executive and nonexecutive directors. This structure is common for small- to mid-sized companies.
Continental Model
Continental’s two-tiered model has a two-tiered structure that gives control to a management board, and a supervisory panel. The management board consists of insiders in the company such as managers and executives. The supervisory board consists of outsiders like bankers and union representatives who have stakes in the company.
Governance that is stakeholder-oriented
This type of governance structure is different from traditional structures, which place emphasis on shareholder interests, considers all stakeholders, including employees, customers and vendors in addition to the community. It encourages directors to adopt policies that reflect social and environmental concerns and to develop effective engagement programs. The board must be transparent and open about its decision-making process and communicate this information to all parties. It is also important to ensure that there are clear lines of communication between the management, the board and shareholders.