For every state, country, or institution that must exist and continue to exist, there must also exist a form of governance. This is responsible for creating a system of policies and regulations that dictate the successful operations of the said state, country, or institution.
In that light, Corporate Governance, as the words suggest, is all about governance in the corporate space. Simply put, it is how companies are directed and managed. Corporate Governance is responsible for the continued existence of any corporate entity and also serves as the pillar on which that corporation stands.
Benefits of Good Corporate Governance
1. Corporate success: Corporate Governance is a technique that helps make effective strategic decisions. A board of directors usually manages a company or an advisory board (if it is an NGO), which can leave room for disagreements, as not all minds will have the same approach to running the business. Corporate Governance ensures the successful running of any company by setting policies and standards that will need to be adhered to by all stakeholders concerned.
2. Increased Investors’ confidence: Happy investors equate a thriving company. A strong and functional corporate governance sustains the confidence of investors and other company stakeholders, which inevitably leads to an increase in capital.
3. Good corporate governance curtails wastage, mismanagement, and risks: Existing policies and rules will ensure that operations within the company are carried out transparently, recorded, and monitored. Every shareholder, staff, and employer inclusive are held accountable. This prevents waste of resources including material and time.
4. It aids all-round growth, order, and brand development: When a house is put in order, growth is inevitable. Good corporate governance will give room for constructive problem solving and lastly…
5. Good corporate governance benefits all: Another benefit of good corporate governance is its ability to serve the best interest of all those within its scope. When formed and implemented, it benefits not just a set of people, but all involved.
Why Practice Corporate Governance as an SME or a Large Corporation?
As an SME: It is in the best interest of a Small and Medium-sized enterprise to form and implement good corporate governance. This will ensure a structured and smooth running of the said SME, where capital and profits increase, inevitably leading to faster growth of that enterprise. Good corporate governance automatically attracts and allows prospective investors to key into the SME brand and help increase its overall output. However, if this is not put in place, instability, stagnation, and possibly, a shutdown of business will follow.
As a Large Scale Enterprise: Growth can only happen where and when some existing policies and regulations serve as guidelines for how corporate processes and jobs are carried out. Also, every individual’s role is very crucial in the continued growth and development of any corporation, big or small. However, if such governing policies and regulations are missing, disorder and mismanagement will win. This puts the company in an unstable and vulnerable place, especially in relation to competitors that already have a well-structured and functional corporate governance in place. Practicing good corporate governance can effectively bring structure, brand identity, and stability to your company. That’s why at Prime KBS Institute Limited, we dedicate ourselves to helping those who want to improve their skills, leadership skills, and all-round operations development.