Governance is everything that supports the work a business has to do. This includes the checks and balances that are in place and the structures in place to ensure that the company meets its goals and avoids problems. It also includes tasks that are geared towards the bigger picture such as preparing long-term strategies or assessing risks. You’ve probably been doing governance duties since the beginning of your business, whether you realize it or not. As your business expands your requirements for governance will also increase. Governance can encompass any structure you prefer, from an sole proprietorship to a full board of directors. It is important to take the time to design your governance plans carefully, and consider how different options could play out for you in terms of your growth plans.
As a company expands the complexity of its governance and requires more attention and resources. If your company is a publicly listed company with thousands of shareholders with multiple share classes, and various lenders, then you will require robust processes to involve shareholders. In addition, you’ll need to have the proper people at the table Top-quality directors with the required skills and experience.
Adopting good governance can allow a business to behave in their best interests, increase their performance and increase stability, productivity, and trust. It also makes the company more attractive to high-quality investors and lowers the cost of capital. It increases transparency and gives the ability to swiftly respond to any crises or controversies.