More about Corporate Governance
Governance, management, responsibility and supervision
Corporate Governance, in the meaning of decent organisation management, seems self-evident, yet many companies can use help drawing up a code in order to concretise the standards of good governance, make their own additions and clarify them to the outside world.
A Corporate governance code allows the various stakeholders to influence the company and to keep the company in tune with its moral responsibilities. Ultimately, it is intended to give the company a good balance between the different stakeholders.
What is good Corporate Governance?
Corporate Governance concerns the management of a company in a sound and morally responsible manner. It is a collection of mechanisms, processes and relationships by which companies are controlled and managed. It provides structure and identifies how rights and obligations are divided between stakeholders. It serves as a guideline, in other words as a basis for how the following points should be designed:
The relationships between:
- Supervisory Board
- The Board
- The Management
Corporate Governance is therefore a relationship between management, management, responsibility and supervision, with integrity and transparency as important factors.
Governance legislation is important, but companies can also go a step further than the law prescribes. The Governments’ Corporate Governance Code is therefore the basis for this.
The Purpose of Corporate Governance
The purpose of the law and setting up your own Corporate Governance code is to prevent morally undesirable behavior (or scandals) at your company. The basis for this is transparency in the financial statements, accountability to the supervisory board and the improvement of control and protection of shareholders.
"Money Talks, Bullshit Walks"
- Thomas Langerwerf
Organize and manage better
As mentioned earlier, the improvement on organisation and management of your company is the reason for drawing up a Corporate Governance policy. We can work with you to translate the standards and values of you and your company into policy. This ensures that your business is properly managed, even if you take a step back. In addition, nowadays it is of course very important to stay as far away from scandals as possible. These can damage your reputation, your company and in some cases even your family. The key points are as mentioned earlier: efficient, transparent and responsible.
Why is corporate governance important?
The reasons why corporate governance is so important are as follows:
- It ensures that all shareholders are treated equitably
- It ensures ethical en integrity in the company
- It ensures that the board has relevant skills en a good understanding to review management's performance. Making sure the management is properly reviewed
- It considers and balances the interests of all stakeholders like shareholders and employees
What is the purpose of corporate governance?
Corporate governance has the purpose to ensure that all the interests of all the stakeholders like shareholders, employees, board of directors, CEO (Chief executive officer), senior-mangement, etc. are heard. It tries to balance every stakeholder's interest and makes sure that the management is controlled by the right people at the right time. The control of the management has to make sure that the management doesn't do anything that negatively impacts the interest of certain stakeholders.
Corporate Governance Code
The Corporate Governance code is intended for listed companies and their shareholders, they must adhere to this code of conduct because it is also enshrined in law. However, a Corporate Governance code is also suitable for non-listed companies.
It contains more than 100 rules of conduct on for example: working methods, remuneration of directors / supervisory directors and tasks. It is intended to strengthen the position of shareholders (through the shareholders' meeting).
Examples of what the code prescribes are:
- Directors are appointed for a term of 4 years;
- A golden handshake may not exceed one year's salary;
- A supervisory director may not have more than five different supervisory directorships;
- A proposal for dividend will be treated as a separate item on the agenda of the general meeting;
- A director will not take advantage of business opportunities that belong to the company for himself or second-degree family members;
The code consists of several topics:
- Long-term value creation
- Effective management and supervision
- Annual General Meeting of shareholders
- One-tier board structure
How do we help with your corporate governance policy?
In addition to drawing up a specific policy for your company, we can also assist you in implementing and monitoring it. These are two important factors for corporate governance, without them it would remain a promise. We have a lot of experience in this subject, our colleagues love a challenge and are always there for you. The open and reliable work structure we use ensures, among other things, that your company is properly managed. Feel free to contact us for more information or advice.