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Types of Corporate Governance Best Practices

Best practices for corporate governance are not just for businesses that are legally structured as corporations. They’re a set of guidelines that managers must not only execute effectively on well-planned strategic plans, they must also be fair and accountable to all stakeholders. Regardless of whether your business has one or many stakeholders–shareholders, employees, clients, students or the community–your company’s approach to governance will change over time and depend on your unique needs and context. However, there are some general ideas that can be applied to any organization, large or small:

One of the most important aspects of a good corporate governance system is transparency. Transparency is vital for board members and management to be transparent to auditors, shareholders and the public about financial reporting, accounting, key decisions and internal practices. This means that your organization should provide information on its environmental and social impacts easily accessible to anyone who may be interested.

Another aspect of corporate governance is setting clear roles and responsibility for your board. This can be accomplished by creating job descriptions for the board as well as its chairperson and vice-chairperson, committees, and their chairs, or by creating terms of reference for directors individually. This ensures a uniform set of responsibilities as well as clear boundaries to delegate and limits on the authority. It helps to create an environment of open and collaborative communication as well as reducing errors and ensure compliance with laws. It can also provide better opportunities for growth as your company real estate data room expands and diversifies.

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