Corporate governance is more than simply checking boxes. They are guidelines that can help companies improve their performance and establish trust with shareholders and other stakeholders. They are a roadmap to the future of your company and can be used in large or small enterprises both private and public, and to companies of all kinds.
Good governance begins with the people. Boards must choose the best candidates, establish a clear process for recruitment and ensure that their members are completely committed to their task. They should also ensure that they have the skills to assess management practices in a timely manner.
Next, we must establish a system that reduces conflicts of interests. This includes setting an ethical code of conduct for directors on the board, as well as the audit committee and the compensation committee, as well as having policies in place to promote transparency and integrity, as well as ethical conduct.
Boards also require a clearly defined structure of leadership and an independent lead Director. This is crucial regardless of whether the board combines the roles of CEO and chair or has an individual chair. A strong independent presiding director is vital to building a culture of co-operation and consensus within the boardroom.
Additionally, the best practices in governance require boards to communicate regularly and transparently with their shareholders and other stakeholders. It is essential to make their financial reports, along with other information accessible. It also means regularly updating their information on new or changing governance principles and encouraging dialogue with the stakeholders.