Types of Corporate Governance

A well-defined corporate governance structure helps to ensure fairness and transparency as well as helping your business develop a solid relationships with shareholders and the community. It helps define roles, assures accountability, and allows for compliance with the law and regulations. It also assists in the long-term growth of a business by aligning shareholder and management interests.

Corporate governance is a complex concept that is dependent on the mission and culture of your company. A few of https://boardroomdirect.blog/saas-companies-acquisitions-best-practices-of-deal-management/ the key concepts to keep in mind are:

Unitary Board Structure

In this system of corporate governance the board of directors is responsible for overseeing and making decisions regarding corporate activities. The board comprises non-executive and executive directors. This structure is common in mid-sized to small businesses.

Continental Model

Continental’s two-tiered structure is a structure that grants control to a management board and a supervisory panel. The management board is made up of the company’s insiders such as managers and executives. The supervisory board is composed of outsiders, like union representatives and bankers with stakes in the company.

Stakeholder-Oriented Governance

In contrast to traditional structures that place emphasis on shareholder interests, this kind of governance structure is designed to consider the requirements of all stakeholders, including customers, employees, vendors and the community. It encourages boards of directors to adopt policies which reflect environmental and social concerns and to create engaging programs that are meaningful. The board should be transparent and open about its decision-making process and share this information with all parties. It should also ensure that there are clear lines of communication between the board, the company management and shareholders.