A clearly defined corporate governance structure promotes transparency and fairness, helping your company to establish strong relations with its shareholders as well as the local community. It helps define roles, assures accountability, and ensures compliance with laws and regulation. It also helps to ensure the long-term development of a company by bringing together management and shareholder interests.
There are a variety of corporate governance, but the one that is most effective for you will depend on your company’s goals and the culture of your company. Some of the most important concepts to be aware of are:
Unitary Board Structure
In this model of corporate governance the board of directors is accountable for making decisions and directing corporate activities. The board is comprised of non-executive and executive directors. This is the most common structure in small and mid-sized companies.
Continental Model
A two-tiered model, the Continental model gives control to a management board and supervisory board. The management board consists of the company’s insiders like managers and executives. The supervisory board consists of outsiders such as bankers and union representatives https://boardroomdirect.blog/real-estate-data-room-and-its-functionality/ with stakes in the company.
Stakeholder-Oriented Governance
This type of governance structure, which is different from traditional structures that place a high value on shareholder interests, takes into account all stakeholders, including employees, customers and vendors in addition to the community. It encourages boards to design engaging programs that are meaningful and adopt policies that reflect larger social and environmental concerns. The board should be transparent and open regarding its decision-making process and share this information with all parties. It must also ensure that there is a clear line of communication between the management, the board and shareholders.