A well-defined corporate governance system promotes fairness and transparency as well as helping your business develop a solid relationships with shareholders and the community. It helps define roles, guarantees accountability, and permits compliance with regulations and laws. It also helps to ensure the long-term growth of a business by bringing together management and shareholder interests.
There are a variety of corporate governance, however the one that’s most effective for you depends on the goals of your company and its the culture of your company. Keep in mind the following concepts that are essential to understand:
Unitary Board Structure
In this corporate governance system, the board of director is accountable for overseeing and making decisions about corporate activities. The board comprises non-executive and executive directors. This type of structure is typical in mid-sized and small-sized companies.
Continental Model
A two-tiered system, the Continental model gives control to a management board as well as an oversight board. The management board consists of insiders from the company including managers and executives. The supervisory board consists of outsiders, such as bankers and union representatives who have stakes in a company.
Stakeholder-Oriented Governance
This type of governance structure, unlike traditional structures that place a high value on shareholder interests, considers all stakeholders including employees, vendors and customers, as well as the community. It encourages directors to adopt policies that address environmental and social issues and develop meaningful engagement programs. The board must be transparent about the process other boardroomdirect.blog/maximizing-deal-success-the-strategic-benefits-of-using-m-a-vdrs/ of making decisions and make it available to all stakeholders. It is also important to ensure that there are clear lines of communication between the board, the company management and shareholders.