Following corporate governance best practices can be a daunting task, but it doesn’t have to be. With the right tools, you can help your board get started and stay on course throughout the year.
It’s typical to believe that corporate governance is merely a matter of complying with the law and adhering with standard regulations however, it’s more than that. It’s a business-oriented approach that can make a difference to a business.
One of the essential elements of good corporate governance is the system of accountability. This means that you have transparent reporting systems and a system of checks and balances that identify any potential issues regarding financial reporting. It is crucial, for instance, to ensure that the board members are aware of their responsibilities and are prepared for board meetings.
Another crucial aspect of a good corporate governance system is establishing a clear plan for the involvement of shareholders. This includes ensuring that shareholders have the power to remove directors when they are not performing well. This means that financial information of the company must be easily accessible, with the ability to access quarterly reports.
It’s important to have a strategy to address social and environmental issues. Many investors are now searching for ESG criteria to help them choose stocks. It’s also crucial to demonstrate your business’s positive effect on society.
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