A clearly established corporate governance structure can promote fairness and transparency, allowing your company build solid relations with its shareholders as well as the local community. It helps identify roles and responsibilities, ensures accountability, and allows for compliance with the law and regulations. It also helps to ensure the long-term growth of a company by aligning management and shareholder interests.
There are many different board governance software products in 2022 types of corporate governance, however the one that works best for your needs is determined by the company’s goals and its culture. Some of the most important concepts to keep in mind are:
Unitary Board Structure
In this model of corporate governance, the board of directors is accountable for making decisions as well as overseeing the company’s activities. The board is comprised of executive and non-executive directors. This structure is common for small- to mid-sized companies.
Continental Model
A two-tiered system, called the Continental model gives control to a management board as well as a supervisory board. The management board is comprised of insiders within the company, such as executives and managers. The supervisory board is composed of outsiders like bankers who have stakes in the company.
Stakeholder-Oriented Governance
This type of governance structure, in contrast to traditional structures that focus on shareholder interests, considers all stakeholders, including employees customers and vendors in addition to the community. It encourages directors to adopt policies that address environmental and social issues and develop relevant engagement programs. The board should be transparent and open regarding its decision-making process and communicate this information to all parties. It should also ensure that there are clear lines of communication between the board, company management and shareholders.
