A clearly defined corporate governance framework promotes fairness and transparency, which helps your business to build strong relationships with its shareholders and the local community. It helps determine the roles and responsibilities of each, as well as accountability and enables compliance with laws and regulations. It also assists in implementing a company’s long-term growth strategy by aligning the interests of shareholders with the interests of the board as well as management.

There are many different types of corporate governance, but the one that is most effective for you will depend on your company’s objectives and the culture of your company. A few of the key www.boardroomdirect.blog/the-most-useful-checklist-for-board-meetings concepts to be aware of are:

Unitary Board Structure

In this system of corporate governance the board of directors is responsible for making decisions and oversight of company activities. The board comprises executive and non-executive directors. This structure is most common in mid-sized or small companies.

Continental Model

A two-tiered structure, the Continental model gives control to a board of management and an oversight board. The management board consists of employees from the company including executives and managers. The supervisory board is comprised of outsiders, such as bankers and union representatives with stakes in a company.

Governance that is based on stakeholder involvement

In contrast to traditional structures that place emphasis on shareholder interests, this type of governance structure is designed to consider the needs of all stakeholders including employees, customers and vendors as well as the community. It encourages directors to adopt policies that reflect social and environmental issues and develop meaningful engagement programs. The board must be transparent about its decision-making process and communicate this information to all stakeholders. It is also important to ensure that there are clear lines of communication between the management, the board and shareholders.