A clear corporate governance structure helps to ensure fairness and transparency, helping your company cultivate solid relationships with its shareholders and the www.boardroomdirect.blog/the-most-useful-checklist-for-board-meetings community. It helps define roles, ensures accountability, and allows compliance with laws and regulation. It also supports a company’s long-term growth plan by aligning the interests of shareholders with the interests of the board as well as management.
There are many types of corporate governance, however the one that is most effective for you is based on the company’s goals and its the culture of your company. A few of the key concepts to keep in mind are:
Unitary Board Structure
In this corporate governance model, the board of directors is responsible to make decisions and supervise the company’s activities. The board is comprised of non-executive and executive directors. This type of structure is common in mid-sized to small businesses.
Continental Model
A two-tiered structure, the Continental model gives control to a board of management and an oversight board. The management board consists of insiders within the company including executives and managers. The supervisory board comprises outsiders like bankers, and union representatives with stakes in the company.
Governance that is based on stakeholder engagement
Contrary to traditional structures that focus on shareholder interests, this type of governance structure considers the requirements of all stakeholders, including customers, employees and vendors as well as the community. It encourages boards and committees to develop meaningful engagement programs and adopt policies that reflect the larger environmental and social issues. The board must be transparent in its decision-making process and communicate that information to all stakeholders. It is also important to ensure that there are clear lines of communication between the board, management and shareholders.