A clearly defined corporate governance structure promotes fairness and transparency, helping your company build solid relationships with its shareholders and the local community. It helps define the roles and responsibilities of each, as well as accountability and ensures compliance with laws and regulations. It also supports the long-term growth of a company by bringing together management and shareholder interests.
Corporate governance is a complex concept that is dependent on the mission and culture of your company. The most important things to keep in mind are:
Unitary Board Structure
In this model of corporate governance, the board of directors is responsible for making decisions and overseeing the company’s activities. The board is comprised of executive and non-executive directors. This structure is common in small to mid-sized businesses.
Continental Model
Continental’s two-tiered model is a two-tiered structure that grants control to a management board and an oversight panel. The management board is made up of insiders in the company such as executives and managers. The supervisory board includes outsiders like bankers and union representatives who have stakes in the company.
Governance that is stakeholder-oriented
This type of governance structure is different from traditional structures that focus 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 concerns and to develop engaging programs that are meaningful. The board must be transparent www.boardroomdirect.blog/what-are-the-four-types-of-corporate-governance and open regarding its decision-making process and make this information available to all stakeholders. It should also ensure that there is a clear line of communication between the management, the board and shareholders.
