How governance is giving corporates an edge

21 August 2019

While corporate governance has always been a consideration, in recent years it’s taken centre stage as businesses recognise the benefits of ensuring a company is managed in line with best practices.

Reasons can range from managing reputational risk or establishing optimum transparency, preparing for future acquisition or simply as a tool to facilitate growth.

Modern corporate governance: anything but boring

Some time ago, corporate governance was approached from a much more passive standpoint: companies would appoint appropriately experienced directors who ensured the business would comply with relevant regulations and consider the interests of all stakeholders as appropriate.

Today, corporate governance is much more nuanced. The Board of Directors could, for example, be considering how a business balances the pursuit of ground-breaking innovation while ensuring that they’re not being irresponsible in terms of risk exposure or jeopardising long-term performance, meaning corporate governance is a continually evolving consideration, not something fixed.

Why is corporate governance so important?

From the perspective of the (often numerous) stakeholders with interests in a company, there’s real admiration for a business that has a strong corporate governance framework and often sets the company apart as having a forward-thinking approach which meets the type of transparency and ethics people are looking for.

Take Unilever as an example: they consider selling off some of their popular (and lucrative) brands if they don’t actively benefit the environment. They did this as part of their focus on being a long-term sustainable business, and in many ways, this is the pinnacle of corporate governance – it shows it’s a company that has defined business goals and will stick to what it’s laid down as part of its corporate governance practice, and they have a board that will enforce and support these types of decision.

How ZEDRA can help

As companies start to recognise corporate government as a means of that bettering business practices and seizing future opportunities as a business evolves, there are lots of steps – large and small – that entities can take to improve their corporate governance.

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