Every business plans to go big. Big plans are made. But what makes those plans a success is the implementation. Corporate governance helps companies in implementing various plans by providing frameworks for rules and procedures to be adopted by the organization stakeholders ranging from board members to employees to customers.
Build a Strong Board
Board of Directors oversee company’s day to day activities and so having a group of experienced and passionate people on board is very important. The board members are generally nominated by shareholders, it is important to have members from a diverse background, not limiting to finance, operations, legal, public relations and marketing. Having a diverse group helps bring a diverse set of insights on the board table.
However, in order to facilitate board members functionalities, provide them with appropriate data and tools relevant to the job. Expose them to the industry details, structure and trends and inform them about the competitive landscape in the current scenario.
The board members need to be accountable for their decisions. A weak board would often avoid strong decisions and side-line themselves from any strenuous activities in the organization. The board which has every member take accountability for their decision will be a strong board boasting confidence of the stakeholders in the organization.
A company should be loyal to its shareholders, and so should the board members. Board members represent the shareholders in the business and it is the responsibility of the members to safeguard the shareholder’s interest in the business.
The way forward to building trust is improving transparency. Transparency is one of the major four pillars of corporate governance. Having transparent relations with your stakeholders builds trust and fosters loyalty among the stakeholders. Lack of transparency will have bad consequences on the business, even a total shutdown. The popular case of Enron scam is an example of how lack of transparency can shut the whole business. Transparency should be restricted to financial records, it should practice transparency in defining roles and responsibilities of the stakeholders, goals and objectives.
The board members are regularly involved in high stake decision making which involves maintaining very high secrecy with respect to information shared within the organization and future decisions. The leak of any confidential information can lead to loss of competitive advantage of the firm. Ensure the board members understand and follow the company’s security policies and set up no negotiable terms on security concerns.
Security also requires board members to oversee security measures within the organization to safeguard internal data from any breaches. Exposed to security breach can lead to a leak of client’s personal data having serious negative effects on companies regulations.
For smooth business operations, it is important to have seamless communication between board members and employees. It is important to have set processes to carry out board’s activities, mapping strategies and risk and opportunities assessment.
A strong Board having access to the right tools along with their commitment to work towards the benefit of business would enable businesses to scale greater heights.
With VComply, ensure good corporate governance by ensuring proper communication and management of business activities.
To read more about corporate governance, click here.Add to favorites