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The establishment of effective corporate governance is crucial to the success and growth of your business. It is a way to ensure that decisions are taken in the best interest of the company and its shareholders as well as to guard against mismanagement and corruption. It also helps the business to meet its social and financial goals while staying in compliance with the law and environmental Governance, Social, and Governance (ESG) best practices.
The primary stakeholder who has influence on corporate governance is the board of directors (BOD). As such, BOD members are responsible to set the direction of the company while determining plans and objectives and management is accountable to implement those goals. While the responsibilities associated with this role are typically financial, current trends are pushing the BOD to assume greater responsibility for areas like the promotion of fair and equitable treatment of stakeholders including vendors, shareholders employees, as well as the local community.
Policy development
The creation and documentation of internal policies or processes is an essential element of a successful corporate governance. These policies should reflect the culture of the organisation, be in line with legislation/regulations and help achieve its desired goals. Making policies available to the public will also help to streamline the process of making decisions and increase the risk-aversion of the business.
A good corporate governance includes developing strategies to address the future issues and opportunities the organization may confront. This can be done through a process known as succession planning, which effectively management of talent with the intention of future-proofing the organisation by creating a strong leadership pipeline.
