Corporate governance, just as any other type of governing, involves a lot of tip-toeing and compromise in a world that often has big dollar implications.
With elected governments, money keeps coming even if failures are aplenty. For corporate structures and private entities, that’s just not how it works.
Failure results in losses of money which result in people getting fired, and ultimately can cause businesses to shut down.
With this general level of heightened importance compared to local governments, enhancing corporate governance tactics should be a frequent discussion in the C-suite at a given company.
With investors, employees, leaders, shareholders and customers all having a say in change, corporate governance structures need to be built in a way that can allow for all voices to be heard. However, a well run corporate government also helps the company minimize risks and prevent fraud and liabilities.
Here are five ways to enhance your governance today:
Define the Roles
Board members and other stakeholders with deep pockets like to feel important, and generally they have earned the right to do so.
Creating a cut and dry set of rules for how and when to voice opinions and concerns, and how to ensure those concerns are heard by all important bodies should be an early step.
Then, to avoid conflict in the future, it should also be determined who has the final say on things related to finance, market strategy, supply chain, etc.
In the modern corporate world, not too many people can look their bosses in the eye when asked the “Where do you see yourself in five years” questions and answer “Here, Ma’am!” with any sort of conviction.
If your company has the ability to change this mold, however, employee retention is great for maintaining a solid corporate governance.
Less training, less new faces, less personalities that could possibly clash.
No matter your role in a given company, the feeling of being in the dark excites negative thoughts towards the company, and can ultimately lead to a lot of issues and a lot of ill-informed speculation.
Creating a streamlined means of information sharing that all of the aforementioned shareholders can reference on a regular basis can help keep the rumor mill spinning a bit slower and ensure no one is feeling like they are kept in the dark – especially the board members.
Being a good leader, or acting as a good unified government, doesn’t mean you have to know how to do everything better than everyone else.
It simply means you have an understanding of everyone’s skills, and a group of people who trust you to dictate how and when those skills are utilized.
Keeping a bank of all of your employees work-related (and past) skills makes for quicker decisions and for a better trusted internal governance team.
Perhaps the most important part of corporate governance is conducting, analyzing, and providing feedback relative to performance, especially the performance of the higher ups in your business.
It’s not too difficult to clean up a mistake by an entry level employee, but if C-level executives are slacking, it is the governing body’s job to show credible evidence of what is being missed, and share a plan of action for fixing the shortcomings.
This often means going in front of the board and speaking about the executive in question. This is no easy task, but it is essential, and a task that really shows the importance of a corporate governance structure.