A clearly defined corporate governance structure encourages fairness and transparency, helping your company to establish solid relations with its shareholders as well as the local community. It helps establish the roles and responsibilities of each, as well as accountability and ensures compliance with the law and regulations. It also supports a business’s long-term growth strategy through aligning the interests of shareholders with the interests of the board as well as management.
There are many different types of corporate governance, however the one that’s most effective for you depends on your company’s goals and culture. A few 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 and directing the company’s activities. The board is comprised of executive and non-executive directors. This structure is most common in mid-sized and small businesses.
Continental Model
A two-tiered system, called the Continental model gives control to a management board and the supervisory board. The management board is comprised of insiders from the company, such as executives and managers. The supervisory board is made up of outsiders like union representatives and bankers with stakes in the company.
Governance that is stakeholder-oriented
This type of governance structure, in contrast to traditional structures that focus on shareholder interests, takes into account all stakeholders, including employees, vendors and customers in addition to the community. It encourages directors to adopt policies which reflect environmental and social issues and develop relevant engagement programs. The board must be transparent about the process of making decisions and share that information with all stakeholders. It should also ensure that there are clear lines of communication between the board, the company visit here https://boardroomdirect.blog/saas-companies-acquisitions-best-practices-of-deal-management/ management and shareholders.