Corporate governance is a set of rules and management tools that guide organizations, who should have proper norms that are compatible with the company and line of business. Proper corporate governance implementation attracts more investment, and boosts investor trust and confidence.
Therefore, proper corporate governance implementation provides multiple benefits to organizations, among them:
Increases company value.
Increases market trust.
Improves possibilities of accessing capital.
Promotes gains in management efficiency and quality.
Facilitates the flow of resources towards the company.
Companies that have a corporate governance policy create a business environment of trust and this process is reflected in organizational growth and structure. Investor trust is the most important asset and as a result, these businesses can access better conditions of financing. This is why it is preeminent that companies focus their efforts in automation to provide the market with quality information proven through efficiency level, clarity, security, etc.
Corporate governance is based on four pillars:
Responsibility: identifying shareholders and their responsibilities.
Independence: regarding executives and auditors that will authenticate financial information, their integral relationship and impartial, objective and independent actions (in regard to other board members).
Transparency: understood as clarity within corporate governance to promote the obligation of generating detailed, timely and precise reports that reflect the organization’s financial situation.
Equality: promotes equal shareholder rights regarding company issues, meaning that all shareholders are entitled to be advised on relevant daily information.
This means that good corporate governance practices are part of an organization’s internal policies and these factors will positively influence product growth, which could translate to generating greater value, competitivity and access to financing.
Corporate governance implementation is no longer a fashionable trend, but one of the means that guarantee the future of a business as it transmits its strategic vision, transparency, certainty and stability. This means greater revenue for entities given better management efficiency and quality; it limits risks and encourages a better industry perception.
Corporate governance is a tool that establishes mechanisms to help in taking objective, informed, collaborative and ethic decisions to regulate a company’s operability; and guarantees protection of a business valued asset: its reputation.