A clearly defined corporate governance structure encourages transparency and fairness, helping your company build strong relations with its shareholders as well as the local community. It helps determine the roles and responsibilities of each, as well as accountability, and allows for compliance with laws and regulations. It also assists in implementing a company’s long-term growth plan by aligning shareholder interests with the interests of the board and management.
There are many types of corporate governance, however the one that’s right for you depends on your company’s goals and culture. Be aware of the following concepts that are essential to understand:
Unitary Board Structure
In this model of corporate governance the board of directors is accountable for making decisions and overseeing company activities. The board comprises non-executive and executive directors. This type of structure is common for small- to mid-sized companies.
Continental Model
A two-tiered system, the Continental model gives control to a management board as well as a supervisory board. The management board is composed of insiders within the company including executives and managers. The supervisory board consists of outsiders, such as bankers and union representatives who have stakes in the company.
Governance that is based on stakeholder engagement
In contrast to traditional structures which focus on shareholder interests, this type of governance structure considers the needs of all stakeholders, including employees, customers and vendors as well as the community. It encourages boards to create engaging programs that are meaningful and adopt policies that reflect larger social and environmental concerns. The board must be transparent in its decision-making process and communicate that information to all stakeholders. It should also ensure that there are clear lines of communication between the board, company management and shareholders.
www.boardroomdirect.blog/board-governance-software-products-in-2022