Corporate governance is not a new concept. From time immemorial and whatever the company, it is governed in such a way as to ensure the interests of its stakeholders. But with the evolution of society's mores, these interests and stakeholders are changing.
Good corporate governance therefore requires taking into account the current issues of the various effective players in the company, in order to guarantee its durability and preserve its image.
Corporate governance: definition
Corporate governance refers to the strategy implemented to manage the company in accordance with the interests of its stakeholders and the regulations in force. By definition, corporate governance is evolving: the company adapts to the issues, the people and the law.
Historically, the company's strategy was profit-driven. Shareholders prioritized the amount of their dividends and the value of their shares.
Today, the voice of the customer is easily heard through social media, so corporate governance must include the customer as a stakeholder. This includes: integrating their expectations for transparency and value for money.
Moreover, in a context of environmental emergency, corporate governance requires that CSR projects be developed in accordance with the law and with respect for society as a whole.
What is the structure of good corporate governance?
The structure of good corporate governance today is based on a new distribution of powers. Shareholders are no longer the only stakeholders, the company must also govern in the interest of employees, suppliers, customers and society at large.
In concrete terms, corporate governance is driven by managers, who act at two levels:
- The management bodies are aware of aware of the current challenges of the various stakeholders. They therefore instill a corporate culture based on values that are consistent with these issues.
- The management bodies then enforce apply processes to serve the interests of stakeholders, and in compliance with the law. Management continuously evaluates and analyzes the performance of these processes, in order to continuously improve them.
What are the principles of good corporate governance?
The quality of corporate governance is based on 5 fundamental principles which are directly related to the current challenges of stakeholders.
#1 Transparency to the consumer 👛
In order to gain the trust of consumers, companies are more than ever required to be transparent. The consumer demands to be perfectly informed before buying, and the law reinforces the obligation of information on the part of the company.
The lack of transparency exposes the company to the risk of "bad buzz", which is all the more harmful as the web increases the circulation of information tenfold.
Transparency is also important for shareholders, who demand that the company provide them with reliable and regular accounts.
#2 Corporate Social Responsibility (CSR) 🌳
The company is a major player in the economy, and as a result its social responsibility has increased. In environmental, ethical or social matters, the company plays a role and must ensure that its governance is in line with this perspective.
#3 Personal Data Privacy 🔐
The advent of digital technology has favored the circulation of personal data, which used to be sold without any consideration for the individual. From now on, the individual, customer or not, wants to control the use of his data.
The law imposes strict rules, especially with the RGPD. Corporate governance must therefore absolutely integrate this fundamental principle to be in order, but also to keep the public's trust.
When a company handles a large volume of data, it relies on efficient security processes and tools, such as the ISO 27001 standard.
#4 Employee well-being at work 💆
Health, safety and well-being: employees legitimately demand that the company take their personal interests into consideration. This issue has become even more important since the health crisis, which is considered to be responsible for triggering a phenomenon known as the "Great Resignation".
In its strategy to govern the company, the management understands that the growth of the company is very closely linked to the satisfaction of its employees, and implements good practices in this regard.
#5 Integrity in Business 💼
The company has integrity towards its employees, customers, suppliers and society in general. Not only because it respects the law, but also because it integrates values that are dear to the community.
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What are the challenges of good corporate governance?
Good corporate governance addresses key issues:
- Brand image A company with integrity and concern for its stakeholders inspires confidence and has a good image.
- Growth and longevity If profit is no longer the only objective guiding corporate governance, it remains a fundamental issue. Good corporate governance, based on the current interests of all stakeholders, therefore guarantees the economic interests of the company.
- Value creation By working "hand in hand" with its suppliers, employees, customers and society, the company creates more value, more quickly. It builds its commercial offer and its sales strategy in accordance with the collective interest, and the results are felt.
Use a tool like DiliTrust to ensure good corporate governance
DiliTrust Governance, a solution for the digitalization and automation of corporate legal activities, helps ensure good corporate governance.
The platform allows to centralize the management of legal activities, to facilitate the follow-up of legal issues and to automate certain tasks, in a perfectly secured software environment.
While software cannot replace the role of the human being, management bodies, which are responsible for good corporate governance, have every interest in relying on a high-performance tool such as DiliTrust Governance to successfully implement their strategy.
Want to know more about how DiliTrust can help you with your corporate governance?
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