Many business owners postpone the implementation of the Corporate Governance system for imagining that this is a time consuming and costly process. This view is quite common in the market and is quite wrong.
Corporate governance does not exist as a standardized management model; it must be shaped and adapted to the situation of each company. Just to give an example, there are companies that, before the implementation of the Board of Directors, need an Advisory Board, which helps to promote changes and evolutions necessary for the company culture.
The practices of Corporate Governance are recommended to companies of any size, for this, we suggest three practices that can bring your company closer to this reality:
- Establish a clear hierarchy
Employees and teams should know clearly, whom they respond to. If an employee performs more than one type of role on separate teams, when receiving demands from various sides, the employee’s ability to deliver may be compromised. It should be clear who your direct leadership is, whom he should report to, so that he can align his activities and set priorities. In addition, a person, in the figure of a president, for example, should receive responsibility for the final decision, in a situation of impasse. In the case of a board with equal roles, this “president” position can be rotating.
- Hold project follow-up meetings and keep your record
Another necessary measure to stimulate corporate governance in your company is to hold regular meetings between teams, between members and between the Board of Directors, when you come to form one. In all of these periodic meetings, projects must be monitored, new company guidelines must be followed, and action plans should be drawn up on targets and indicators. This is a way to maintain a more efficient administrative control of the company and to monitor its progress.
In addition to these measures, it is imperative that a company keep records of these meetings organized and filed in minutes. When an investor enters your company, he will want to evaluate it from the beginning. Therefore, these documents, with financial statements, projections and other records, are essential to be accountable to current or future shareholders and serve as a basis for decisions on the Board. It is also advisable to make them available whenever necessary and with a confidentiality agreement, to maintain the transparency of the company and to enable future actions, such as the sale of shares or obtaining credit.
- Form an Advisory Board
The Advisory Board facilitates the sharing of experiences and suggestions for the management of your company, bringing together professionals with more baggage and different profiles, who have already faced challenges similar to yours. Talking periodically to the management of the company, which should play its biggest growth difficulties at the table, the Advisory Board can guide them in decision-making. It is usually composed of 3 to 5 people of your confidence, highly capable and willing to help them at least a few times a year, with the most diverse themes, aimed at increasing efficiency, innovation and relevance in the market.
The implementation of these practices will promote necessary changes to the corporate culture, preparing it for the development of the Board of Directors and inserting it into a select share of the national and international economic market.