A clearly defined corporate governance structure encourages fairness and transparency, allowing your company build solid relationships with its shareholders and the local community. It helps identify roles and responsibilities, ensuring accountability and ensures compliance with the law and regulations. It also supports a company’s growth strategy over the long term by aligning the interests of shareholders with the interests of additional info the board and management.
Corporate governance is a complex concept that is based on the objectives and the culture of your company. A few of the key concepts to be aware of are:
Unitary Board Structure
In this model of corporate governance the board of directors is responsible for making decisions as well as overseeing the activities of the company. The board includes both non-executive and executive directors. This type of structure is common in mid-sized and small companies.
Continental Model
Continental’s two-tiered structure is a structure that grants control to a supervisory board and the supervisory panel. The management board is comprised of employees from the company like executives and managers. The supervisory board comprises outsiders such as bankers and union representatives who have stakes in a company.
Governance that is stakeholder-oriented
Unlike traditional structures that prioritize shareholder interests, this kind of governance structure takes into account the requirements of all stakeholders, including customers, employees, vendors and the community. It encourages boards to develop relevant engagement programs and implement policies that reflect larger environmental and social concerns. The board should be open about its decision-making process and communicate this information to all stakeholders. It is also important to ensure that there is a clear line of communication between the management, the board and shareholders.