A Case Of Corporate Governance

Corporate governance defines the relationships between the owners of a business/institution, the board members and the management.

It is a system of policies, processes and rules that direct and guide a company. For it to work, their is a need for consistency in applying policies.

This helps develop a culture of integrity, trend of positive performance and in the long run sustainability of the business/institution. Often small and medium sized companies as well as family businesses think that they do not need a board. However, whether a business is small / medium / family, it has a life cycle. It normally will grow exponentially in early years when focus and passion is still very strong. Then it plateaus for some years, being consistently maintained at same level. After a few years of this plateau phase, business will either start regressing on a downward trend or at that point if the right mix of a good board is set in, new life is injected and business will often experience fresh positive exponential growth.

So do not belittle the role of good Corporate Governance if you are a small/medium / family business.

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