A clearly defined corporate governance structure promotes transparency and fairness, helping your business build solid relationships with its shareholders and the local www.boardroomdirect.blog/the-most-useful-checklist-for-board-meetings community. It helps determine the roles and responsibilities, guarantees accountability and helps ensure compliance with the law and regulations. It also supports a business’s long-term growth strategy through aligning shareholder interests with the interests of the board and management.
Corporate governance is a complicated concept that depends on the mission and culture of your company. A few key concepts to be aware of are:
Unitary Board Structure
In this model of corporate governance, the board of directors is accountable for making decisions and directing corporate activities. The board includes both executive and non-executive directors. This structure is common in mid-sized and small-sized companies.
Continental Model
Continental’s two-tiered model is a structure that grants control to a management board and an oversight panel. The management board consists of insiders within the company including managers and executives. The supervisory board is comprised of outsiders, such as bankers and union representatives who have stakes in the business.
Governance that is stakeholder-oriented
In contrast to traditional structures that place emphasis on shareholder interests, this kind of governance structure considers the needs of all stakeholders, including employees, customers as well as vendors and the general public. It encourages directors to adopt policies that reflect environmental and social issues and develop effective engagement programs. The board should be transparent and transparent about its decision-making process and make this information available to all stakeholders. It should also ensure there are clear lines of separation between the board, management and shareholders.
