Types of Corporate Governance Best Practices

Corporate governance is not only for legally-structured businesses that are corporations. It’s a framework that requires leaders to go beyond just implement well-thought-out strategies. They must be accountable and fair 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. There are a few general principles that can be applied to any size company:

One of the most crucial aspects of good corporate governance is transparency. Transparency is vital for board members and management to be open with auditors, shareholders, and the public about financial reporting, accounting, key decisions and internal procedures. This also means that your company provides information on its environmental and social impact in ways that are easily accessible to anyone who might be interested.

Establishing clear roles and responsibilities is another aspect of corporate governance. This can be accomplished by creating job descriptions for the board including its chairperson and vice-chairperson committees, their chairs or by creating terms of reference for directors individually. This will ensure that there are clear boundaries and limits to authority, and the same list of duties. It can help to create a culture of open communication and collaboration and help to reduce errors and ensure compliance. It could also lead to more opportunities for growth when your business expands and diversifies.


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