A clear corporate governance structure helps to ensure fairness and transparency and helps your business build an enduring relationship with its shareholders and the community. It helps define roles, assures accountability, and allows compliance with regulations and laws. It also helps to ensure the long-term development of a company by aligning shareholder and management interests.
There are many types of corporate governance, but the one that is most effective for you depends on the goals of your company and its culture. Keep in mind the following key concepts:
Unitary Board Structure
In this corporate governance model, the board of directors is responsible to make decisions and supervise corporate activities. The board includes both non-executive and executive directors. This kind of structure is prevalent in mid-sized and small companies.
Continental www.boardroomdirect.blog/real-estate-data-room-and-its-functionality/ Model
Continental’s two-tiered model is a structure that grants control to both a management board, and the supervisory panel. The management board is made up of insiders in the company such as managers and executives. The supervisory board is composed of outsiders like union representatives and bankers with stakes in the company.
Stakeholder-Oriented Governance
In contrast to traditional structures which focus on shareholder interests, this type of governance structure considers the requirements of all stakeholders including employees, customers as well as vendors and the general public. It encourages boards of directors to adopt policies which reflect environmental and social concerns and to develop effective engagement programs. The board must be transparent about the process of making decisions and share that information with all stakeholders. It is also important to ensure that there are clear lines of communication between the board, the company management and shareholders.