Corporate governance is the process of making rules, policies and controls and resolutions that promote a positive corporate https://scoreboardroom.com/steps-to-create-a-nonprofit-social-media-policy culture and behaviour. It also helps protect organizations from threats to their business and crises like corruption in the leadership and cybersecurity threats. It also includes contingency planning that helps companies cope with the forces of business and emerge stronger and more resilient.
Corporate governance structures and practices differ depending on a company’s size, industry, ownership structure, and jurisdiction. These governance structures and practices, regardless of their differences, should all have the same objective: to create long-term value to shareholders. They should also provide flexibility to adapt and modify their governance practices as necessary to accomplish this goal.
The board of directors for a company is responsible for establishing objectives for strategic planning, appointing top management and evaluating them, and representing shareholders’ interests. The board members must understand their responsibilities and work closely with the company’s senior management to ensure that their responsibilities are carried out in a way that encourages growth of the business and financial performance.
Stakeholders should be encouraged participate in shareholder outreach and dialogue with the board and management of an organization. This will enable them to voice their opinions known in areas that, historically, were within the purview of management and the board–such as strategic direction and decisionmaking. It is crucial that the management and board are honest and open about their governance structures and practices, and the motivations for why they employ them.
