WHY SMALL BUSINESS NEEDS CORPORATE GOVERNANCE?
What is Corporate Governance?
Corporate Governance refers to the system of principles, processes and structures that are used to make decisions about the management and operation of a company. It is often associated with the Board of Directors and their role in the company. The goal of Corporate Governance is to ensure that a company/ business is run for the benefit of its shareholders, employees and other stakeholders.
There are several key principles of corporate governance, especially good corporate governance, these include:
- Ethics and integrity
- Accountability and transparency
- Roles and responsibility
These principles combine to create a system of processes and structures that help hold businesses accountable and transparent when it comes to their dealings, stakeholders, and various shareholders – particularly employees and the public.
Why is Corporate Governance important to Businesses?
Corporate governance is important as it provides a system of principles, processes and structures that are used to make decisions about the management/operation of a company. This ensures that decisions are made in the best interests of all stakeholders, not just shareholders.
Good corporate governance allows corporations and businesses to remain accountable to stakeholders and ensures that the business is being conducted ethically. While there are many benefits to corporate governance, not all organisations embrace these practices.
Do Small Businesses need Corporate Governance?
While a small business may not be as complex as a large corporation, it still benefits from corporate governance practices. Corporate governance can help to ensure the continued success of the organisation and its employees. Some of the key areas that corporate governance can impact a small business include:
- Financial stability of the business;
corporate boards and staff. This is because strong boards and staff include a variety of people, skills, talents, abilities, experiences and perspectives. This can help create a work environment that stimulates new ideas, growth, and overall success.
No matter what the size of your organization is, implementing corporate governance practices can help you achieve your goals. The fundamental principles of corporate governance- fairness, accountability, responsibility and transparency- should be adhered to by all businesses in order to maintain a high level of accountability and transparency. For small businesses, corporate governance can be especially beneficial as it allows them to be more competitive and pursue opportunities with a higher level of confidence, Organizations can ensure that their activities are conducted ethically and responsibly to maintain a positive reputation in society. When it comes to Corporate Governance, small businesses need to be looking to apply its principles into their business models. Small businesses should be looking to follow the same good corporate governance principles as large corporations and not only implement them into their business models, but embrace them.
For more enquiry, you can contact us at SOW Professional Services Ltd for necessary supports and implementation of Corporate Finance in your Organisation.