Tips to improve your corporate governance

Corporate governance is a system of policies and procedures that guide the conduct of your business, its leaders and employees. Improving your corporate governance will help you to manage your business better.

Businesses with good corporate governance practices have a proactive strategy for behaving responsibly, reducing compliance and regulatory risks, and preventing potential conflicts of interest in decision-making.

The way your company is governed can be the difference between success and failure.

Good corporate governance is a multi-faceted process that requires a great deal of communication, commitment, integrity, transparency and technical skill to make sure the building blocks are in place.

Here, we take a closer look at what corporate governance is, the need for a clear policy framework to guide it, and some tips to help your organisation improve its governance.

The importance of corporate governance

Corporate governance refers to the way a business is directed, controlled and supervised.

Businesses with sound corporate governance practices typically fare better than those that don’t.

Corporate governance guides the structure and behaviour of a company’s board, committees and leadership teams and how they interact with the firm’s management to ensure the overall smooth running of the business.

It also includes the policies and processes through which businesses accomplish effective control over their financial, regulatory and operational risks and carry out their services and activities.

Corporate governance is defined as the ‘deliberate, systematic process of managing an organisation to maximise the interests of stakeholders’. It comprises the processes, relationships, customs, laws, regulations, contracts, institutions and entities that govern its operations.

It’s important to note that in this context, stakeholders could mean company owners, shareholders, directors, employees, suppliers, partners, and, crucially, customers.

Tips to improve your corporate governance

If you’re interested in reforming your corporate governance programme, some of the things you should consider include:

• Do you have a system in place to ensure accountability and follow-up for decisions made?
• Does the leadership and organisational structure help the company operate transparently and legally?
• Do you pledge yourself and the company to the highest ethical and legal standards?
• Do you extend that commitment to your suppliers, customers and employees?
• Are meetings kept to a strict agenda?
• Are decisions made with a voting process?
• Do you have an enforcement process for decision-making?
• Do you ensure that there is a mechanism for identifying risks?
• Do you seek feedback from all stakeholders?
• How do these factors influence your organisation’s culture?

Where do policies fit into corporate governance?

Businesses are at their most effective when they can create an environment that is good for employees, good for customers, and good for shareholders. Their policies should create the framework and environment to achieve these aims.

Corporate policies aren’t just technical manuals for anyone to read and reference. They should be seen as rules and guidelines to be acted upon by everyone in the company.

Policies are vital for helping organisations of all sizes minimise risk and meet their regulatory and compliance obligations.

Moreover, if a company wants to build a high-performance culture, it must embed its mission, vision, values, and standards across the organisation to act as the platform upon which the culture grows. After all, customers want to know that the company they are doing business with is one they can trust.

Having employee standards of conduct published in the company’s policies helps deliver this message.

A company that has transparent, concise, easy-to-reference policies for employees is one that employees respect, while employees that know the company has a code of conduct expected for everyone involved will be more likely to obey the rules set out for them.

To maintain scalability and visibility, you should document your company’s guidelines in a corporate governance policy. When corporate governance policies are written and distributed correctly, they have more chance of being read, understood and accepted by your employees.

This will help establish rules of behaviour and accountability, highlight the desired culture, guide decision-making, and address any potential risk areas to ensure you can meet your regulatory and compliance obligations.

Your policies can be supplemented with multimedia training materials and other resources, but the corporate governance policy should always set out the framework for the various decisions that need to be made.

How can Policy Central help?

Policy Central is an online policy management platform designed to equip business owners and senior management with the tools and resources they need to guide and protect their business, staff, contractors, suppliers and other key stakeholders.

It gives users complete control over key policy content to help ensure your organisation’s latest policies are distributed to all relevant parties to ensure compliance is achieved.

You can track and monitor the delivery and acceptance of key policy documents electronically and

gather evidence that staff have read and understood each one before they tick to accept.

You can also automate the dissemination of your policies and monitor your main risk areas to get a real-time, 24/7 view of the health of your organisation and its governance.

With this information and insight, you can address any potential issues before they become significant problems, identify any training or skills needs and redraft any old or outdated policies to ensure they remain relevant and compliant with changing regulations.

Good corporate governance is something that businesses of all sizes should strive for. Your policies – and the way they are managed – will provide the building blocks on which a robust governance structure can be built.

Policy Central’s integrated online policy management platform can help your business achieve this.  To find out more and book a free consultation, get in touch today!

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