A well-defined corporate governance structure is a great way to ensure transparency and fairness as well as helping your business develop a solid relationships with its shareholders and the community. It helps define roles, ensures accountability, and allows compliance with laws and regulations. It also assists in the the most useful checklist for board meetings long-term growth of a business by aligning shareholder and management interests.
Corporate governance is a complicated concept that depends on the mission and culture of your company. Be aware of the following fundamental concepts:
Unitary Board Structure
In this corporate governance model, the board of directors is responsible for making decisions as well as overseeing corporate activities. The board includes both non-executive and executive directors. This structure is common in mid-sized to small businesses.
Continental Model
Continental’s two-tiered model is a structure that gives control to both a managerial board, and an oversight panel. The management board is made up of insiders from the company such as managers and executives. The supervisory board includes outsiders like bankers and union representatives with stakes in a company.
Stakeholder-Oriented governance
In contrast to traditional structures that place emphasis on shareholder interests, this kind of governance structure is designed to consider the requirements of all stakeholders including customers, employees vendors, and the community. It encourages boards to create relevant engagement programs and implement policies that reflect the larger environmental and social issues. The board should be transparent and transparent regarding its decision-making processes and communicate this information to all stakeholders. It should also ensure there are clear lines of separation between management, the board and shareholders.