It isn’t always easy to follow corporate governance best practices, but you don’t have too. The right tools can help your board start off and stay on track throughout the year.
Corporate governance is more than simply following the law and adhering standard regulations. It’s a method of doing business and it has the potential to change an organization to improve its performance.
One of the key elements of good corporate governance is the system of accountability. This means having transparent reporting systems as well as an established system of checks and balances that are able to identify any potential issues in the financial reporting. It’s important, for example to ensure that each board member is aware of their roles and are well-prepared for board meetings.
Another important aspect of a good corporate governance system is to establish a clear pathway for the involvement of shareholders. This means that shareholders have the power to remove directors when they are not performing well. It means that the information about the financials of the company should be transparent and easily accessible, including the ability to access quarterly reports.
It’s essential to have a strategy in place for addressing social and environmental issues. Many investors are now looking for ESG criteria to help them choose stocks. It’s also crucial that you can demonstrate your business’s positive effect on society.