Following corporate governance best practices can be a daunting endeavor however it doesn’t need to be. The right tools will assist your board to get started and remain on the right track throughout the year.
It’s typical to believe that corporate governance consists only of complying with the law and adhering to regulations however, it’s more than that. It’s an approach to doing business and has the potential to change an organization to improve its performance.
Accountability is among the most essential aspects of corporate governance. This means that you have transparent reporting systems as well as the system of checks and balances to detect any issues that could be a problem regarding financial reporting. It is for instance, important to make sure that all board members are aware of their roles and that they are prepared for board meetings and other events.
Establishing a clear path to a positive engagement of shareholders is an essential element of good corporate governance. This includes ensuring that shareholders have the ability to remove directors who are not performing well. This also includes having clear and easy-to-access information about the company’s finances, such as the ability to look at the quarterly reports of a company.
In addition, it is essential to have a clearly defined strategy to address environmental and social issues. This is because investors have become more interested in ESG criteria when selecting stocks, and it’s also essential to demonstrate that your business has a positive impact on society.