Over recent years, reforms have focused on making companies ever more accountable. Key amongst these reforms have been measures that put a spotlight on corporate governance within organisations.
Effective corporate governance is not just about ticking off a list of requirements. It’s about actively involving your board of directors in the running of your company.
There is a wide range of benefits that result from good governance practices. These include:
- Enhanced regulatory compliance, financial understanding and risk mitigation;
- Better organisational strategies and strategic planning/execution;
- Improved stakeholder engagement and communication;
- Increased delivers on purpose/mission; and
- Greater value creation through research, development and innovation
And while there is no “one size fits all” solution for good governance. The governance arrangements of an organization are influenced by a variety of factors including:
- The nature of its activities – such as operating risks associated with the particular sector;
- Geography and stakeholders;
- The regulatory environment and the legislation that governs the organisation (such as the Corporations Act, and/or state-based Associations Incorporation Acts);
- The constitution of the board; and
- Requirements of grantors, funders and other key stakeholders.
Regardless of the size of your organisation, the involvement of your board of directors in driving good corporate governance has a critical impact on the success of your company.